While many companies focus on optimizing processes, developing new products and acquiring new customers, it's important not to overlook the value of cultivating customer loyalty and delivering great customer experiences. The benefits of doing so can be significant and can have a positive impact on your company's ROI. The key is to have a professional CX setup that delivers the data driven insight you need to outperform competition. Because most companies face fierce competition and battle for customers every day.
According to Harvard, customers who have had the best past experiences with a company spend 140% more than those who have had the poorest past experiences. This is a staggering statistic and underscores the importance of delivering excellent customer experiences every time.
The 4 main ROIs of having happy customers
When customers feel valued and appreciated, they are more likely to continue doing business with your company, and they may even increase their spending over time. These are the four biggest financial benefits an organization can expect by generating happy customers:
1. Retaining customers is five times more cost-effective
Retaining an existing customer is much more cost-effective than acquiring a new one. As an example, the Harvard Business Review notes that it can cost up to five times more to attract a new customer than it does to retain an existing one. This means that focusing on customer loyalty and satisfaction can be a smart investment that pays off in the long run.
2. Reduce your cost-to-serve by up to 50%
In addition to the financial benefits, improving customer experience can also reduce the cost to serve customers. McKinsey reports that companies that focus on delivering excellent customer experiences can reduce their cost to serve by up to 50%. By streamlining processes and making it easier for customers to do business with your company, you can reduce costs while also improving satisfaction.
3. Get valuable customer feedback for your business development
Happy customers are also more likely to provide valuable feedback on your company's products and services. This feedback can help you identify areas for improvement and stay competitive in your industry. By listening to your customers and incorporating their feedback into your business practices, you can continue to deliver exceptional experiences that keep them coming back.
4. Increase your share of business and achieve higher revenue
Finally, customers who have had great experiences with your company are more likely to trust your brand and develop a strong commercial relationship with your company. This will lead to increased share of business and higher revenue over time.
Happy customers may be your most valuable asset
In conclusion, delivering great customer experiences and cultivating customer loyalty can have a significant impact on your company's ROI. By focusing on these areas, you can increase customer spending, reduce costs, and improve your bottom line over time. So don't underestimate the value of happy customers – they can be one of the most valuable assets your company has.
Remember to show the value of having loyal customers internally
And one final recommendation: Find a way to show your organization how your loyal customers generate revenue.
That is why thought leaders within customer experience like Fred Reichheld recommend you apply financial metrics to measure how large a share of your revenue or growth is generated from loyal customers returning, buying more, and recommending you to others.
We leave you with this question: How much of your revenue is “earned” by treating customers well – and how much is “bought” from getting new customers through traditional marketing and sales?
Do you know what to ask for in your customer survey?
