Loyalty Starts At 90%
Most business have three types of customers: Dissatisfied, Satisfied and Loyal or highly satisfied. We refer to this last group as Raving Fans.
The goal of CalPro Research is to help increase your following of loyal customers. A loyal customer is generally considered to be a customer that rates you at a 90% or higher score in customer satisfaction survey. On the 1 to 5 scale used in CalPro Research surveys, this would be a score of 4.5 or above. A satisfied customer would rate your business from 3.0 to 4.4 and a dissatisfied customer would rate you less than a 3.0.
How would your customers rate your business? Increasing the percentage of loyal customers can have huge impact on your bottom line.
Satisfied Customers Are Less Loyal Than You Think
Never assume your "satisfied customers" are all that satisfied. According to Frederick F. Reichheld in his book Loyalty Based Management a whopping 65% – 85% of customers that defect say they were "satisfied." In other words, your regular customers… the one's most businesses take for granted… are less satisfied than you think! In fact, repurchase rates can be as low as only 40%, even when up to 95% of your customers say they are satisfied with you. One reason is that they have a vast array of choices, so if your customers have second thoughts about your services, it's just too easy to choose a different business.
Creating Loyal Customers Pays Off
If you offer great service, and completely satisfy all the expectations your customers have, you'll develop a following of loyal customers. Don't confuse "completely satisfied" with "satisfied." These aren't "run of the mill" regular customers, but "dyed in the wool" dependable, regular customers that keep your cash flow going. Creating and keeping loyal customers can have a huge impact to your bottom line. Did you know that raising customer loyalty and retention by only 5% could return a 35% or more increase in your profits? In fact, according to an American Management Association study, up to 65% of a typical business' volume comes from patronage by loyal customers.