Over the years, People Pulse has researched and compiled statistics on the importance of customer satisfaction and retention, its impact on the bottom line, and the merits of measuring customer satisfaction. Below is a collection of some of the most interesting statistics they have come across to date:
Customer Satisfaction:
- 91% of unhappy customers will never purchase services from you again.
- At any one time 22% of all law firm clients are considering switching firms because of problems with their current legal firm.
- For every customer who bothers to complain, there are 26 others who remain silent.
- Typically only 25-30% of a company’s clients are completely satisfied – Such low satisfaction means that 70% or more of the firm’s clients may be open to pitches from competing companies.
- 70% of complaining customers will do business with you again if you resolve the complaint in their favor.
- Each one of your customers has a circle of influence of 250 people .
- 96.7% of unhappy customers never let out even a squeak of dissatisfaction to the organization that has given them bad service. According to research they will tell at least 15 other people, while satisfied ones will tell six at the most.
- Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. The prevailing reason for switching was poor quality of service.
Client Retention:
- It costs about five times as much to attract a new customer as it costs to keep an old one.
- Raising customer retention rates by 5% could increase the value of an average customer by 25-100%.
- The probability of selling service to a new customer is 1 in 16, while the probability of selling service to a current customer is 1 in 2.
- Loyal customers who refer others generate business at very low or no cost.
- It’s easier to get present customers to buy 10 percent more than to increase your customer base by 10 percent.
- A typical supermarket customer’s worth? $380,000!
- The average business loses between 10 percent and 30 percent of its customers each year.
- If a credit card company can hold onto another 5% of its customers each year (increasing retention rate from, say, 90 to 95%), then the total lifetime profits from a typical customer will rise, on average, by 75%.
Measuring Customer Satisfaction:
- 96-100% of clients interviewed say they approve of client satisfaction surveys.
- 60% of clients interviewed in person will give a firm new business within 60 days of the survey.
Article References:
- The White House Office of Consumer Affairs (http://www.articlesfactory.com/articles/business/5-ways-to-keep-your-customers-coming-back-for-more.html)
- Earl Sasser of Harvard Business School and Merry Neitlich of Extreme Marketing
- TARP (http://www.tarp.com/index.html)
- Eastbridge Consulting Group (http://www.eastbridge.com/news/oi2000/sum007.htm)
- Karl Albrecht (The Service Advantage, Dow Jones, New York, 1990, p. 199)
- Frederick F Reicheld (The Loyalty Effect, Harvard Business School Press, 1996 Chapter 2 – The Economics of Customer Loyalty)
- Forum Corporation research (http://www.crforum.co.uk/)