Customer Feedback Leads to Customer Retention
You’ve heard by now it is 6-7 times more expensive to acquire a new customer than it is to keep a current one. For the effort it requires vs. the payoff it gives you, excellent customer retention is a better marker of success than excellent customer acquisition. That’s because your existing customers see value in your product and are committed enough to make the choice to buy. While you only have 5-20% chance of selling to a new prospect, you have a 60-70% chance of selling to an existing customer.
Retaining your customers increases their lifetime value, fosters brand loyalty, and provides you with a consumer base proven to respond positively to your services. That’s why in the next few years, companies will gain 80% of their revenue from just 20% of their existing customers. (There’s that good ‘ol 80/20 rule!)
That being said, keeping your customers happy should be a no-brainer for marketers. Customer feedback sheds light into why your customers are using your products and services, how their interactions with your company are perceived, and what new elements of value they are looking for to make their experience more enjoyable. By asking your current customers what makes them tick, you make sure that they feel listened to, that they have an outlet for their issues or questions, and that you are staying connected to their wants and needs.
Customer Feedback Puts a Spotlight on Brand Ambassadors
When people think about customer feedback, their mind jumps to the negative things people have to say. But what about those that love you?! They are out there, and they will tell the world. Getting their feedback can help put a spotlight on potential brand ambassadors for your company. These are people passionate about your brand, satisfied with your company, and active and engaged enough to share their opinions. Brand ambassadors are invaluable to your company, and finding them can be an effective way to begin a customer rewards program, an advocacy program, or an online community or forum.
Customer Feedback Doubles as Risk Management
Part of the reason why brand ambassadors are so valuable is because of the positive word of mouth reviews they give to their friends, families, and colleagues. The power of word of mouth is not to be reckoned with, especially in the age of social media.
According to the White House Office of Consumer Affairs, people relay a bad customer service experience to twice as many people as a good service experience. There is no doubt that unhappy customers talk, and what’s even worse, they often don’t talk to you. 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience, and yet a typical business only hears from 4% of its dissatisfied customers. This means that when someone is unhappy with your business, and you’re not actively seeking customer feedback, your customer will leave, not mention the issue to you, and then go tell friends and family about it. A recipe for disaster. And no one likes the taste of disaster. Luckily, customer feedback gives your customers a sounding board to voice their concern and get it fixed before they decide to go somewhere else.
Sum It Up
In the end, it’s all about using your most valuable resource, your existing customers, to gain insight into how to keep them your most valuable resource for years to come. If you want to keep your company healthy and happy, make sure you are making significant efforts to collect data on what customers want and to offer a feedback channel that allows you to intercept bad experiences before they lead to churn (yuck!).