Tag Archives: client retention

CX: Realities & Piftfalls

People readily acknowledge that an organization must provide “good” customer experience (CX) in order to maintain their competitive position.

In support of this perspective, here are some interesting statistics that can help quantify the value of allocating time and resources to the customer experience and to effective customer service:

  • 80-90 percent of service problems are leadership related (Deming, Juran, and Crosby)
  • Fewer than half of US executives know who their most loyal customers are (Acxiom & Loyalty 360)
  • A 5% increase in customer retention increases a company’s profits by 25% to 95%, and a 10% increase in customer retention levels result in a 30% increase in the value of the company. (Bain & Co)
  • Consumers who have stated that they have a strong relationship with a single brand, over 64% said it was because they had a “shared value” with the brand in question (Harvard Business Review)
  • 70% of buying experiences are based on how the customer feels they are being treated.(McKinsey)
  • It is 6-7 times more costly to attract a new customer than it is to retain an existing customer. (White House Office of Consumer Affairs)
  • 55% of customers would pay extra to guarantee better service (Defaqto research)
  • A 2% increase in customer retention has the same effect as decreasing costs by 10% (Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy)
  • 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back (1Financial Training services)
  • 83% of consumers require some degree of customer support while making an online purchase. (eConsultancy)
  • 45% of US consumers will abandon an online transaction if their questions or concerns are not addressed quickly. (Forrester)

Common Pitfalls

Beware… while many have recognized the above-listed realities, they have also failed to make effective transitions that truly improve the customer experience or retention levels.

According to a recent McKinsey article, some of the most common pitfalls associated with ineffective customer experience transformations are:

  1. Lack of vision. “Many managers enter a transformation with no real vision for the organization’s future state,” the article explains. “Instead, they have a general desire to improve the customer experience and rush into action very quickly, before defining a more specific vision. Targets are often vague, devoid of aspiration, and lacking in specificity…”
  2. No top-level commitment. If the transformation effort doesn’t become a top priority for the CEO and the executive team, it will likely lose momentum or stall completely as other “priorities” arise, or when various stakeholders resist the “extra work,” or when general apathy materializes.
  3. Failure to quantify potential gains. Without a clear expectation of the anticipated return-on-investment, it can be difficult to secure sufficient resources or the necessary budget.
  4. Misaligned goals. Referenced as “heedlessness” by McKinsey, launching a customer-experience transformations based on assumptions about what matters most to customers can result in little-or-no gain and lots of frustration. “Some organizations set out to boil the ocean,” the article states. Similarly, and despite good intentions, trying to transform all parts of the business at once will seldom result in success.

Satisfied Customers

customer service and retention is a primary responsibility for us allIn a recent article, our associate Alan MacNaughton noted that the primary functions of any business are to get customers and keep them.

While getting customers is primarily the job of sales and marketing personnel, KEEPING those customers is the responsibility of EVERYONE in the organization, from those involved in producing the product or delivering the service, quality assurance, customer service, technical support, credit and collections, right through to the shipping personnel.

All these functions can impact (positively or negatively) how the customers perceive your company. The best (perhaps the only) way to keep customers is to insure that every customer is a SATISFIED customer.

Regardless of the type of business, insuring customer satisfaction has many benefits:

  • A dissatisfied customer is easy prey for your competitors. Conversely satisfied customers resist vendor changes
  • Satisfied customers can be your best and lowest cost sales force. They may recommend your company to others or allow you to use them as references
  • Satisfied customers tend to be less cost sensitive, and may believe that paying a modest price premium for superior service is worth it

Comment…

Revenue Growth Through Strategic Customer Service


There are many components to business development and many ways to grow revenue; and strategic customer service is definitely one of the often-overlooked pieces of the puzzle.


When asked, most people say they do their best to provide good customer service. However, the methods vary significantly and tend to be inconsistent. To maximize the effectiveness of your organization’s customer service effort, it’s best to develop and implement a measurable, strategic approach that leverages your organization’s unique benefits and that can become both consistent and cultural.

Creating a plan, setting goals, enhancing communication and monitoring results are the key elements of the process. Here are some specific ideas on how you might get started:


  • The first step is to learn three key things about your customers what they like, what they don’t like and how they feel about your organization
  • Next, identify your organization’s unique offerings from a products and services perspective (what you offer/do) as well as a behavioral perspective (how you offer/do it)
  • Note the alignment between these first two items, and then determine the things associated with your organizational behavior and unique offerings that your customers value the most the real benefits
  • Define action steps that will exemplify and reinforce these benefits, as well as a communication style that expresses these benefits in terms that are relevant to your customers (rather than to you and your staff)
  • Create and implement a system in which your organization consistently executes the action steps and communicates in the style noted above
  • Monitor and measure results… recognize and reward behaviors that are aligned with the process, and continually discuss and refine the process regularly include this topic on staff meeting and sales meeting agendas