Understanding Why Customers Leave May Be More Important Than Understanding Why They Come
Published: September 01, 2010
The cost of acquiring new customers can easily add up to five times that of retaining current customers. In the new world of marketing, where CMOs are more cost conscious than ever, a focus on customer retention is a necessarily logical pursuit.
This isn’t just my opinion; we’ve done the research to back it up. Our company recently completed our fourth annual study of the restaurant industry, the Leaky Bucket 2010. The study analyzes the return intent of customers to a restaurant brand. Conducted in March, the study included 2,483 respondents and analyzed more than 146 brands. Our methodology analyzes a brand’s leak score. The higher a leak score, the more customers that brand is losing; lower leak scores indicate a higher level of customer retention. For the fourth year in a row, the study results overwhelmingly indicate that brands that invest in guest experience retain more of their customer base and can thereby reduce marketing expenses and increase profitability…