According to The Harvard Business Review, businesses lose 50% of their customers every five years.
Authors Emmet and Mark Murphy reveal that a 2% increase in customer retention has the same effect as decreasing costs by 10%. Further, depending on the industry, reducing your customer churn by 5% can increase profitability by 25% to 125%; and irrespective of industry, customer profitability tends to increase over the life of a retained customer.
Bain & Co. research shows that a 10% increase in customer retention results in a 30% increase in the value of the company.
In a comprehensive survey, the U.S. Chamber of Commerce identifies the top reasons customer leave. 68% leave because they are upset with the treatment they've received (Customer Service) while 14% are dissatisfied with the product or service.
RightNow Technologies says 73% of customers leave because they are dissatisfied with customer service, but the company losing the customer thinks only 21% leave for this reason. The company losing the customer thinks 48% leave because of price, when in fact only 25% do so. Most companies find it hard to believe that their customers don't love them. They would rather believe that price is the culprit. It hurts their feelings less, but costs their companies more, because not only have they lost the customer, but more than likely they lowered their prices to try to keep them.