- The average American company loses half its customers within five years.1
- A business is twice as likely to successfully sell to a lost customer than brand new prospect.2
- A 2x buyer is typically five to ten times more likely to reorder than a 1x buyer.
- Acquiring new customers can cost five times more than retaining current ones.
- A 5% reduction in customer defection rate can increase profits by 25-125%, depending on the industry.
- A 2% increase in customer retention has the same effect on profits as cutting costs by 10%.
- A 1% improvement in retention can increase customer equity 3-7%.3
And yet:
- 75% of direct marketers lack a performance measuring system
- 66% have no formal method to trace marketing’s impact on acquisition & retention
- Only 44.8% monitor defection and retention rates {42.2% don’t, 12.8% don’t know}
- 36% have no formal system for evaluating leads and contacts
CMO council survey, January 2006.
1The Loyalty Effect, by Frederick F. Reichheld, 1996
2Call Center Magazine, January, 2006, pg 41
3Return on Customer, Peppers and Rogers, 2005
August 6, 2007
