Customer Retention — Not Just Acquisition

TeleworkPH
Published: February 28, 2022

Customer retention is the key to a brand’s success! But how can you keep those customers without breaking the bank?

Here’s a quick question for you:

How much does it cost for you to get one customer? You may need to head over to your sales department and find out exactly how much it costs to acquire just one customer. I’m certain it’s going to be more than you want to spend. I mean, look! No one wants to spend a whole lot of money on a business. We’re in business to make money, so those costs for marketing, advertising, brand awareness, must be balanced and justified once we sign up the new customers.

Then take a look at how much it costs to retain just one customer. Or even more, how much revenue is each customer responsible for?

I’m sure by now, at this point in your company’s journey, you know exactly how much each customer brings in at each level. So after comparing the two, which is more cost-effective? Furthermore, how do you retain customers and still keep overhead low?

You’ll want to keep reading to get those answers.

Customer Acquisition VS. Customer Retention

When these two work hand-in-hand it’s an amazing symbiotic relationship. However, when it’s unbalanced and we’re relying on just one, say customer acquisition, then that imbalance could cause a huge disruption in the flow of revenue. Also, it could lead to more cash going out than coming in. According to Forbes, acquiring a new customer can cost between 5 to as high as 25 times more than just retaining your existing customer.


So, if you are losing 2 —3 —4 customers per week due to poor customer retention efforts, keep in mind how much it costs to replace those customers and then to build up their loyalty. Obviously, businesses cannot run without customers. Customers are revenue. So you know how much revenue is lost when one customer is sacrificed to bad service.

There are a lot of conversations that go on about your company or brand and you may feel that you don’t have any control over it. Especially those that want to hop onto social media to totally rip your brand’s name apart because they had a bad experience.

But the fact is you do have control over that, by not cutting corners when it comes to the customer experience.

How Much Revenue Is Lost In Poor Customer Retention Efforts?

I’ll be doing a series on the effects of poor customer care (and how to bounce back) in the coming months. However, it’s important to insert here that many companies are under the impression one or two mistakes should not make a difference. That the customer should forgive and forget. Yet, there are several variables that can influence the way a customer will react when things go sideways.

For instance, if the overall experience is spectacular and your product or service truly gives the customer a sense of well-being, they will be more apt to forgive a mishap or issue now and again. They’ll remain your customer and tell their friends how quickly you handled the issue and that your brand has gained their trust.

So of course, there’s a converse side to that. Zendesk did a study and it showed that 80% of customers said they were willing to investigate and even do business with the competitor after just one bad experience. And 50% said they would definitely do business with the competitor after just one bad experience. Another study done by Qualtrics XM Institute showed that only 1 out of 5 customers said they would forgive a bad experience with a company that had poor customer service.

These are some scary statistics. With this data, companies in 2022 are savagely competing through customer experience. So consistently losing 50 to 80% of the customer base over to the competitor and then trying to play catch up with acquisition keeps the company on a hamster wheel basically going nowhere.

The Customer Experience IS Paramount To Success — Not Just Acquisition

Customers are willing to spend more money when they have a good experience. When they feel good about the brand they are dealing with. Remember that the customer journey is an emotional one and the entire purpose, one would assume, of your product or service is to solve a pain point in a customer’s life.

The bottom line is you must treat your customers like people. You don’t want to overwhelm them with technological advancements they aren’t ready for. Or give them automation and chatbots to help solve complex issues. You want to give them an outstanding experience with personal recognition.

Then a whole new world will open for you and your company or brand when you see more customers pouring in because of the simple fact you built and maintained an amazing customer experience pyramid.

WARNING! Focusing On Customer Retention Can Have Side Effects

…like increased revenue and that golden goose — word-of-mouth advertising. The longer a customer uses a company or brand their lifetime value (LTV) increases. Making them more valuable to the company. Statistics show that customers with a higher LTV, are four times more likely to promote a brand or company to others. So, that certainly lends validity to wanting to keep customers around for as long as possible.

But what are some of the ways companies are using to not only attract but retain customers?

Bizrate Insights found that several factors can influence a potential customer’s decision to purchase. Things like: discounts, reward system, free shipping, etc. However, all of these can also influence a current customer to remain loyal to your brand.


I remember years ago when I lived in the US and I had a car, I would go to one specific gasoline station gas station and I’m not going to say the name the brand name it’s it’s a large brand a large chain I should say, however I used to go there frequently because of their rewards program.

There was a card and for every fill you got one number punched and once you filled up that card you would get I forget what it was. I believe it was like a free cup of coffee or $10 off your next purchase which is quite a lot.

Going Gold

Another one that I used to and now this is taking us way back this is back when this will really show my age let’s just say. Blockbuster Video now I understand that maybe that might not be a good example because Blockbuster Video has gone out of business, but it is not a fault of their own (or was it?). They were just unable to keep up with the advancements in technology and the customers’ needs

However, in its heyday, Blockbuster Video was the place to go. Furthermore, they had a rewards program that was absolutely amazing. I remember being at work on a Friday and the conversation would always drift to who had what plans for the weekend.

“I’m going to go to Blockbuster Video as soon as I get out of here today,” I would promote “I’m getting a bunch of new releases for the weekend.” I would even go on to tell my coworkers that they should go there and explain how much of a great experience I was having at Blockbuster Video. In short, I felt good going there!

Membership Has Its Privileges

I would literally tell everyone how I just reached the level of gold membership at no cost to me, just from being a loyal customer. And all the perks that went along with it. There were free movie rentals, and I could even reserve new releases to make sure I had a copy before they were all rented. And there were discounts on popcorn, candy, and sodas on certain nights of the week. On other nights of the week, if I rented one, I could get one “off of the floor” for free, which were older movies, but they were good ones to watch again. Through just having that experience and talking about what I was getting—how I was having such a great time being a loyal customer to Blockbuster Video, I was promoting them. At really no cost to them.

Customer Retention Efforts Brings Word-Of-Mouth

So, word-of-mouth advertising doesn’t break down to just actually having somebody go out and say “Hey, please try this brand that I’m using…” (like influencer marketing) it also can come in the form of comments and conversations. All stemming from the experience. Which is quite powerful.

Someone may say: “I use this service over here and they’re OK”.

But then your customer will say: “I use [insert your brand here] and they are amazing! Their customer service is out of this world. Yeah, it might cost a little bit more, but I really don’t mind paying because they really take care of you over there!”

Statistics say that out of the 7 billion people on the planet, at least 4 billion are on some form of social media.

That leaves 3 billion people who aren’t. Amazing! Yes? And we aren’t talking about 3 billion people who live in the Amazon jungle. Normal, everyday people in our society right now. Also, many may have social media but never use it. I’m going to give you an example. My assistant is not a social media person.  She has social media accounts, but she doesn’t spend her time scrolling through any feeds. It’s just not her thing.

How The Personal Touch Can Enhance The Customer Experience

Before I entered the world of business process outsourcing and experienced the Philippines, I was a chef. Yes, the real type of chef you would see on Hell’s Kitchen. I spent a lot of my early years working in Country Clubs and Hotels. One of the major factors of the customer experience that really hit home to me back then was the level of what the Country Club members expected.

For instance, even those of us who didn’t really mingle much with the members, we’re required to learn the top members’ (if not all the member’s) names. Especially the club president.

This way, if you had to go out to the golf course, or if you were in the dining room and saw one of the top members, you could address them by name. That personal recognition was one of the reasons they joined the club in the first place. People love being recognized and hearing their own names. That extra step went a long way.

It’s things like the above that will let your customers know you’re in it for the long game. That their happiness and satisfaction have no limits. Especially when it comes to customer service and customer support.

The Customer Support Team And Outsourcing

For your support and service, you want to find people who want to work. Who live and breathe the customer experience and customer retention. Because believe it or not, there’s a lot more to customer support than just putting somebody on the phone who can answer questions or take payments. (We’re going to be focusing a lot over the next few months on some of the best customer support practices that you can employ here in this blog and the podcast, TelecastPH). Understandably, building a team of high-quality individuals can be more expensive than you’d probably want to spend. Your company needs to maintain a healthy margin to make a profit.


That is where outsourcing comes in. By building a team with Telework PH, you are going to get university graduates, who speak amazing English, and are passionate about customer service. These career-oriented individuals are the key to your customers getting an outstanding experience and increasing revenue, all the while decreasing overhead costs.

How?

Let me give you a quick example. In September 2021, we were contacted by an Australian company that had never outsourced before but had been thinking about it. After some consideration, they decided to take the plunge with three agents.

Once they saw the level of the talent and skill that they were able to get from the team we were building for their customers, they were more than impressed. Coupled with the overall savings and the overwhelmingly positive feedback from their customers, they were convinced that they had made the right decision. Not only did they scale up their support team, but added two other teams from other departments as well! What started as a three-agent trial turned into over fifty agents working across three departments for them.

Customer Retention Begins With Telework PH

You can’t go wrong when you build a team with Telework PH. Get ready to bring on a staff of highly skilled, experienced, English speaking agents who are passionate about the customer experience.

Keep watching this blog and our podcast, TeleCastPH for more tips and ideas about the customer experience and customer retention. We keep a close eye on the ever-evolving trends.

If you feel like this would be a great fit or are ready to explore, feel free to contact us and book a quick call to talk about the best options for you and your brand.

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Why Companies Outsource to the Philippines… And Stay There.

By TeleworkPH | September 25, 2018

Things to Remember to Have Meaningful Conversations with Your Customers

By TeleworkPH | January 28, 2018

What Customer Loyalty Is and How to Build It

By TeleworkPH | December 10, 2017

Customer Retention and How It Works

By TeleworkPH | November 8, 2017

Customer Satisfaction and Its Importance

By TeleworkPH | October 24, 2017

Social Media Tricks that You Think Are Okay but They’re Definitely Not

By TeleworkPH | August 17, 2017

Show Your Remote Workers that You Care with These 5 Easy Tips

By TeleworkPH | August 11, 2017

Employee Engagement and the Rise of Telecommuting: What It Means for Your Biz

By TeleworkPH | June 29, 2017

5 Reasons Why Neil Patel Recommends Outsourcing

By TeleworkPH | June 14, 2017