How to improve your Profit and Growth
No single thing you do will have more impact on your profit and growth and how long you stay in business – than continually improving your customers experience. Something we can say with absolute certainty and confidence – Why – because put in its most simple form: No customers = no business.
“There are only three measurements that tell you nearly everything you need to know about your businesses overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no business, large or small, can win over the long run without continually improving these three things” – Jack Welch, former CEO of GE
When you boil it all down nearly all your profit, cash flow, growth and value is derived from your customers, so it stands to reason that if you want to improve any, or all, of these things, then the best place to start is with your customers. Improved customer experiences lead to lower costs and higher profits and growth.
Study after study continues to show that the Customer Experience leaders nearly always have greater profitability, growth and business value and significantly outperform their competitors and the overall market. They do this because they enjoy the many benefits that happy, loyal customers deliver: better retention, greater wallet share, lower acquisition costs and more cost-efficient service.
Profit = Revenue less expenses
To maximise profits and growth business will traditionally focus on 2 things – maximising revenue and minimising expenses. So how does improving your customers experience help you maximise revenue and minimise expenses? Lets start with revenue. Improving your customers experience increases your revenue due to better retention, less price sensitivity, greater spend per customer and more referrals and repeat business.
Loyal customers are:
- 5 times more likely to buy from you again.
- 3 – 5 times higher spend per visit.
- 7 times better chance to up sell or cross sell to.
- 5 times as likely to forgive a mistake.
- 2 times cheaper to service and support.
- 4 times more likely to refer you to friends & family.
Did you know that:
- 65% of businesses are able to upsell or cross sell to existing customers, the figure drops to 12% for new customers.
- The chance of selling to an existing customer is 2 – 2.5 times higher than a new.
- Top customer experience businesses have on average 5 times higher profits than others
And what about minimising your expenses, – Improving your customers experience reduces your expenses due to reduced acquisition costs, fewer complaints, and the less intense service requirements of happy, loyal customers.
Did you know that:
- A 2% increase in customer retention has the same effect as decreasing costs by 10%.
- It costs 6 – 7 times more to acquire a new customer than retain an existing one.
- Lower advertising, sales and marketing costs due to better and more frequent word of mouth
- Unhappy customers are more expensive to maintain and retain
- It takes 12 positive experiences to make up for one bad one.
Which all results in … Better profits, business value and long term outlook.
- Increasing customer retention by 5% can increase profits anywhere form 25% – 95%
- Increasing customer retention by 10% can increase in the value of a business by 30%.
- The life time value of your customers is becoming an increasing important factor in determining the sale price of many businesses.
- 79%of high-income households avoid businesses for 2+ years after a bad customer experience.
- 86% of customers said a bad experience was their reason for leaving a business
- loyal customers are can generally be up to 10 times the value of their first purchase
In contrast, the businesses that haven’t invested in improving their customer’s experience suffer from on-going customer and employee dis engagement and frustration, increased attrition, negative word-of-mouth and increased operating expenses.
Imagine then Act!
Even if you could achieve 25% – 50% of the above results imagine how much better that would make your business
Don’t let your competitors determine how well your business does.
Customer experience is the heart and soul of every successful business, and its impact on whether a business thrives or dies will only increase over time. While it is the greatest untapped opportunity to both reduce costs and increase revenue within your business, It’s not just about delivering a great or outstanding customer experience – It is about delivering a better one than your competitors!
For those smart businesses that want to get and stay ahead – its been proven countless times that businesses that concentrate on, and excel in, the experience they deliver to their customers are the market leaders. Smart businesses realise it is no longer about what they sell, but what the customer chooses to buy and from whom.
Unfortunately, the mistake 90% of business owners make is believing that Customer Experience is optional, a “warm and fuzzy” thing that doesn’t really effect their business, or they believe their own press and assume their customers are happy and satisfied. Because of this customer experience, culture and employee engagement are the most under rated, mis understood and over looked business disciplines.
The good news is that for the other 10%, the smart business owner like you, there is a huge opportunity to move away from the competition and having to compete on product and / or price.
Contact us to find out how – it doesn’t matter what stage your customer experience development is at – we can help you improve and grow