from Consultant Consortium, Linked In 18 June 13 enhanced by Peter/CXO Wiz4biz
Significant changes in Customer Retention rates have resulted in extraordinary improvements in “profitability”. [Don’t you like the sound of that?] One survey found that a 5% increase in customer retention consistently resulted in a 25% to 100% increase in profits. Wow !!! These almost unbelievable results would suggest that there must be a powerful force, (your emotional connection to your customer) which needs to be understood & effectively managed.
Creating a Business Model that focuses on “Loyalty”, would then suggest, in fact, a linkage between all elements of a business system: your employees, customers, & investors for the generation of profits. Providing customer value begins with a management philosophy that supports the cultivation of strong customer relationships and is implemented by having properly trained & motivated employees who know how to deliver your “value”. Research has shown that customers who have an emotional connection and feel “valued”, will repeatedly come back and do business with your organization as well as provide a strong referral base for new customers. Loyal customers repeatedly purchasing your product or service are what generate sustainable business growth & profit. However, your practices & processes that generate loyal customer relationships must be in place, before you will begin to see a profitable impact. This model does not work in reverse, although many organizations by their actions appear to think the reverse is possible.
Your new “loyalty” Business Model is important, because it initiates a series of steps that can cascade through an organization as follows:
1. Revenues & Market Share grow as your best customers (loyal customers) build repeat purchases and recommend you to others who also become loyal.
[ Benefits of Loyalty = Profits up, Costs down and more in Premium Content]