Want High ROI? Invest in Customer Retention

By Andrew Paparozzi
In February 16, 2016

Where will you be investing in 2016? Variable-data capabilities to support personalized, targeted communication? Workflow efficiencies? Marketing to build brand and increase lead generation? They all top the investment lists of Epicomm State of the Industry participants.

But what about investing in customer retention? Maybe that isn’t on the list because our retention rate is high and we have excellent relationships with our clients—which our satisfaction surveys show. In short, maybe we believe that we have it covered.

These articles will encourage us to reconsider:

  • “Why Satisfied Customers Defect,” Thomas O. Jones and W. Earl Sasser, www.hbr.com. The huge difference in loyalty between customers who are “completely satisfied” and customers who are only “satisfied” and the affect that difference has on our profitability.
  • “How to Build an Early Warning System,” www.totango.com. Calculating customer engagement scores, or leading indicators of the health of our relationships with key customers, because what customers do is more important than what they say.
  • “The Customer Service Strategy With The Best ROI,” Adrian Swinscoe, www.forbes.com. Why we should be asking our most important customers this question: What are we doing that annoys you?
  • “10 Ways to Get More Sales From Existing Customers,” Donna Fenn, www.inc.com. Increasing retention by growing share of customer.

Jones and Sasser’s extensive research shows that “increased customer loyalty is the single most important driver of long-term financial performance,” and that “increasing customer retention by even 5% increases profitability by 25%–95%.” With that kind of ROI, let’s be sure customer retention is always an investment priority.

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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