08 Apr “Just The Facts Ma’am”
Just The Facts Ma’am
I miss Detective Sergeant Joe Friday and Dragnet. It harkens back to a simpler time of moral clarity when truth wasn’t quite so relative. “Just the facts Ma’am.” Here’s the opening to the show for a short 60 seconds of nostalgia: http://www.youtube.com/watch?v=mdyvqFN6bCU
On May 1, we’re inviting some senior business leaders to The Tenacity Center for Account Management and Client Retention to discuss client retention – ‘just the facts’. Thankfully, there is little debate or lack of clarity around the benefits of retaining profitable clients. In preparation, we’ve updated our fact base and looked at what others are saying too. Here are some of the headlines:
80% of companies believe that they deliver a superior client experience, but only 8% of their clients agree with them. (Bain & Co. from Harvard Management Update)
Client satisfaction is not predictive of client retention – except at the very highest levels of satisfaction (essentially those clients that are above the 80th percentile). (Marketing Metrics)
To achieve a .2-point increase on a client satisfaction score of 8.0 (out of 10) requires approximately twice as much effort as achieving the same .2-point increase on a score of 7.0. (B2B International)
Re: Cross Selling – The probability of converting an existing customer is 60 – 70 percent. The probability of converting new prospect, on the other hand, ranges from 5 – 20 percent. (Marketing Metrics)
A 5% increase in client retention can increase a company’s profitability by 75%. (Bain & Co.)
Successfully attracting a new client will generally cost your company at least 5 times more than doing what is necessary to keep an existing client. (LCE Research)
68% of clients leave you because they perceive that you are indifferent to them. (Customer Thermometer)
60% – 75% of clients will continue to do business with a company if it deals with a service issue fairly – even if the result is not in their favor. (sarocks.co.za)
When MBNA halved its’ defection rate, profits rose 125%. (ncbi.nim.nih.gov/pubmed/10107082)
While some of these insights may bleed over into the customer side, as opposed to the client (B2B) side, I think we can agree that the preponderance of the evidence argues in favor of strong client retention investments. Facts that would satisfy even Sergeant Friday.
On May 1, we’ll be focusing not only on the ‘why’ but also the ‘how’. If these insights can make a difference for your firm and you’d like to know more, let us know. We’ll stick to the facts.
John & Steve