Retain 5% More Customers, Reap 35-95% More Profit

Did you know that if you keep 5% more of your customers, you will make 35-95% more profit? Those were the findings of a Harvard researcher* when he investigated the financial impact of keeping customers around. The chart above demonstrates how a 5% increase in retention rates increased profit across a variety of industries. The equation is simple: make us stick around (usually by making us happier) and we’ll make you more money. Cut out support, services, make it difficult to talk to you, etc, and while you might save in the short, you’ll lose in the long-term.

[via The Value Creation Process in Customer Relationship Management (PDF)]
* Reichheld, F. F. and Sasser, W. E. Jr. “Zero Defections: Quality Comes to Services”, Harvard Business Review, September-October, 1990, pp. 105-111.

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