Retaining loyal customers and reducing Customer churn- summary

Steve Downton, Downton Service Management Consultants Ltd, Noventum Group

I received a phone call shortly after my last article was published in Service Management to determine where I had gathered my statistics – specifically those on why a company loses customers.  The answer in this case was a book entitled Keeping Customers for Life, published at the end of the Nineties.  The question made me think about where such statistics originate and how relevant they are and I was reminded of the saying - There are three kinds of lies: lies, damned lies and statistics. 

Statistics can be used to provide an indication of the various issues, however in this fast changing world, it would seem dangerous to rely on general statistics and more efficacious to find out specific relevant results.  One company I know measures its satisfaction index to two decimal places because with customers in the millions it is essential to measure to this level of detail.  The actual number of customers they lose per year is around 8.5%, which means in a 6 year period, half the customers will have left. With the cost of acquisition of new customers, and the much lower cost of keeping existing customers it is important to keep the loss of customers even lower.

How do companies keep close to their customers, how do they measure and maintain loyalty and reduce the number of customers they lose (churn)?

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