 |
|
|
|||||
Customer retention is more than a buzzwordit is a proven driver of sustainable growth and profitability. Sounds like common sense? Think again. Customer churn is on the rise. Yet, while many organizations recognize the value of keeping customers, far fewer appreciate the full spectrum of losses that arise when performance is merely good enough. The hidden costs of unremarkable customer experiencelost profit margins, missed cross-sell opportunities, shorter customer lifespans, fewer referrals, and reduced purchase volumescan quietly erode the bottom line. These losses are often multiplied by the ripple effects of customer complaints or service failures, which extend far beyond immediate transaction. The well-proven benefits of customer retention Despite the overwhelming evidence, many companies still chase short-term sales incentives or focus on launching new and improved products, neglecting the reliable, long-term value of customer loyalty. They view retention as a binary effortkeeping the customers or losing them. In reality, it is not. Under the surface of customer relationships, there are further opportunities to capture and enhance the strength and longevity of the relationships. Cost efficiency: Acquiring a new customer is five to seven times more expensive than keeping an existing one. This makes retention a far more efficient use of marketing and operational resources. Revenue growth and profitability: The first product you sell to a customer is usually not the last one you hope to sell. Business growth from existing customers and improved margins are directly linked to the value delivered in the first sales interaction. If it was boringly predictable, the customers will not be interested in growing the relationships. What would the impact on your business be if every customer decides to purchase one more product? Customer lifetime value (CLV): The longevity of a customer relationship is another critical dimension of the health of the relationship and the power of retention. What will the impact on your business be if a customer decides to extend their lifetime by one more year? Predictability results in smart investment: Loyal customers provide steady, recurring revenue, enabling better forecasting and strategic investments. Such stability allows you to invest in new products, adapt new technologies, and expand into new marketsas opposed to reserving your investments and staying behind. What will you do differently if you would be provided with revenue stability? More customers, by referrals: Referrals are gold. But how many of them do you actually receive? What would the impact on your business be if 505 of your new customers came from previous customers? What would you customer acquisition cost look like? What would you do with the savings? These benefits show that the path to profitability is often shortest when it focuses on reducing the currency and maximizing customer value. Boring performance leads to further losses If the benefits of retention are not compelling enough, the hidden costs of mediocrity should be. Deciding to take the customer for granted and delivering less than remarkable value comes with a price. You thought you saved money. Think about the hidden losses you have created. Too often, companies see customers as single product or service purchasers, not as long-term partners with substantial lifetime value. This narrow view leaves significant value on the table and blinds organizations to the deeper financial consequences of failing to deliver exceptional experiences. 1. Tougher negotiationsgreater profit compromises When customer experience is boringly predictable, price becomes the primary battleground. Disappointed customers are more likely to demand discounts or concessions, eroding profit margins. In B2B environments, this effect is even more pronounced, as clients leverage the threat of switching to competitors to negotiate deeper discounts. The absence of a differentiated, memorable experience makes it easy for customers to walk awayor to squeeze suppliers on better terms. 2. Loss of future products purchases Customers, unimpressed by their experience, are unlikely to explore additional products or services. Cross-selling and upselling options are routinely missed when the customer relationship is transactional rather than relational. Research consistently shows that personalized and relevant recommendations drive sales, but mediocre experiences stifle these opportunities. 3. Losses in customer relationship longevity Unremarkable experiences accelerate customer churn. Each lost customer represents not just a single transaction, but the entire future value of that relationship. Companies that accept churn as a cost of doing business, rather than a solvable problem, forfeit millions in potential revenue and incur additional costs to replace lost customers. 4. Loss of future customers referrals Referrals are the gold standard of customer endorsement. Exceptional experiences inspire real recommendations that bring in new customers with no acquisition cost. Conversely, dissatisfied customers are not only less likely to recommendthey are more likely to share negative experiences, amplifying reputational damage and deterring potential new business. 5. Reduction in purchase volume Customers who receive unremarkable value often reduce their spending over time, spreading purchases across multiple vendors to minimize risk. Without a compelling reason to consolidate business, companies lose out on the larger share of wallet that comes from loyal, engaged customers. Why hidden losses persist If the financial case is so clear, why do so many organizations fail to prioritize customer retention and experience? Several factors contribute: Short-term focus: Shareholder and leadership pressure often drive companies to pursue quick wins at the expense of long-term investment in customer relationships. Inertia: Many organizations assume customers will tolerate mediocre experiences rather than switch, underestimating the ease with which customers can move to competitors. Fragmented ownership: Customers are often owned by different departmentsmarketing, sales, servicewithout a unified view of lifetime value or coordinated retention strategy. Lack of definition: Few companies have a clear, actionable definition of what constitutes an exceptional ustomer experience, making it difficult to set goals or measure progress. Incomplete data: Without comprehensive data on customer behavior and value, organizations struggle to make informed decisions about where to invest in experience improvements. Product-centric culture: A focus on products and features, rather than customer needs and journeys, relegates the customer to an afterthought. Misaligned metrics: Traditional satisfaction scores may not accurately reflect the true impact of customer experience on retention and growth. Missing tools and training: Employees often lack the resources, training, and empowerment needed to deliver truly exceptional experiences. Boring is not an option Delivering an unremarkable value to customers is not just an act of taking them for granted and belittling their intelligence. It comes with a heavy price. While customer retention is the cost we see on the surface, it is well understood. The hidden losses from unremarkable performance expose a deeper, more profound case of evaluating the performance. Providing exceptional customer experience is more than about keeping customers. It is about protecting profit margins, unlocking cross-sell potential, extending customer lifespans, generating referrals, and maximizing purchase volume. In a customer-first economy, investing in exceptional experiences is no longer optional. Organizations must honestly assess their customers commitment, confront the obstacles to delivering on retention strategies, and understand the full scope of losses that come from settling for good enough. Only then can they make the strategic decisions necessary to stand out, build lasting relationships, and thrive in a competitive marketplace. Lior Arussy is the cofounder and chairman of ImprintCX. His latest book is Dare to Author!
Category:
E-Commerce
We doubled our marketing team, and still fell behind. Thats what one founder told me in January, frustrated after months of hiring, onboarding, and budgetingonly to lose ground anyway. In 2025, the old formula of more people equals more results just isnt working. Lets face it, traditional hiring is broken. Its costly, time-intensive, and built for a world that no longer exists. Training takes months, and even the best employees cant be experts in everything. And scaling up or down? Thats nearly impossible when your budget is tied to headcount. That said, full-time employees are still the heart of any great company. Their creativity, dedication, and drive are what push businesses forward. So, what is a leader to do? Thats where the right agency comes in. Not to replace your team, but to amplify it. An agency partner keeps your business agile and efficient, filling in gaps without replacing your team. Instead of overloading in-house employees, an agency can bring specialized expertise exactly when and where it’s needed, without adding overhead. 5 reasons to amplify your team with an agency Heres why teaming up with an agency could be the right move in 2025. 1. Access to a dream team When you work with an agency, youre not gaining just one person, youre tapping into an entire squad of experts. Need killer copy, smart SEO strategies, or top-notch data insights? Theyve got you covered. Building a team like that in-house takes time and money, but an agency delivers it all, with minimal onboarding. This means your employees can focus on the big picture goals while the agency handles the specialized execution that drives results. 2. Smarter spending Hiring is expensive. Salaries, benefits, equipment, training…it adds up fast. Then theres turnover46% of employees plan to job hunt in the next three months, and replacing an employee costs about 50% of their annual salary. That number jumps to 100% for higher-level roles. Agencies, on the other hand, come with clear, predictable costs. Theyre not about cutting corners; theyre about making smart investments. You get the best of both worlds; high-level expertise without the financial risk of full-time hires. 3. Staying ahead of the game The marketing world never stops moving, and you must be ready to pivot at a moments notice. Agencies, like social media-focused marketing agency Firebelly, are built for this. They constantly test new tools and strategies, so you dont have to. I recently spoke with Duncan Alney, founder and CEO of Firebelly Marketing, about how businesses today cant afford to fall behind. As a social media marketing agency, were focused on staying ahead of the industrys trends and news. Marketing shifts too quickly, and in-house teams are already stretched thin, Duncan shared. Firebelly brings the advantage of real-time insights and adaptability, things that are nearly impossible to maintain internally.” Your team can focus on longer-term growth while your agency keeps you on the cutting edge. 4. Scalability, when you need it Businesses arent predictable. Maybe youve got a product launch coming up, or maybe its a slow season. Agencies ramp up or scale back as necessary, taking the pressure off your team. Its like having a safety net that adjusts as you go. 5. Hit the ground running Hiring and training new employees takes time, and sometimes you need results ASAP. Agencies come in ready to go. They bring proven systems, expertise, and results. Instead of waiting months to see progress, you build momentum right away. As a marketer and business owner, Ive seen firsthand how agencies can transform businesses ready to level up their marketing. The right agency can bring expertise, speed, and flexibility to the table, working alongside in-house teams. This isnt about replacing your employees, its about giving them the support they need to shine. Before you post that next job opening, ask yourself: Could an outside partner help you achieve your goals faster and with less risk? In 2025, the smartest way to build from within might be by looking outside.
Category:
E-Commerce
Most people think of urban open spaces in terms of grand parksChicagos Millennium Park or New Yorks Central Park or San Franciscos Golden Gate Park. These are our iconic parksour sublime spaces. They serve as the lungs of our cities, and they certainly steal our hearts. These spaces are not locked behind gates but are stages where our own lives play out and memories are created, full of movement and reflection and joy. There are more modest spaces in our cities, though, that are just as important to our livesthe thresholds and courtyards and pocket parks. Theyre the places where we bump into our neighbors to walk our dogs or read on a bench in an environment where nature takes over. They are often unheralded like a great Olmsted Park, but always full of potential for true placemaking to begin. My father, Edwin Smith was director of parks and recreation for the City of Eugene, Oregon and he knew this. He served for more than 30 years and was responsible for the design and development of 41 parks and greenways in and around the city. His work had a profound impact on me as a future architect. More to the point, his work and vision quietly enhanced the lives of so many people in the community as their access to parks was interwoven into their lives. Westmoreland Park is one of Eugenes centerpiece parks and is a great example. Its gentle slopes and lush lawns support stands of mature cedars and redwoods, not to mention Douglas firs, hemlocks, spruces, and the Oregon white oak. Even if you dont know all those trees by sight, you know Westmoreland Park if you live in Eugene, and you know that it offers something for almost every active resident. I think thats the importance of a well-designed spaceit invites and it responds. Living ribbon of connection Responsiveness is a word worth pausing on for a moment. Its the entire reason for designarchitectural, urban, or otherwiseand its one of the hallmarks of placemaking. My firm, MG2, recently envisioned design for an attainable housing project in Irvine, California, that was meant to respond to a specific housing challenge in a rapidly changing part of the state. It isnt a monolith. It is, instead, what we think of as a living ribbon of connectiona continuous path that links breezeways, community gardens, play areas, and shared courtyards woven throughout the residential units. It is not simply a circulation route. It is a spine, and just like our spines, everything it touches depends upon it for structure. But more importantly, this isnt just a collection of amenities. It is a social ecosystem. The layout fosters degrees of interactionprivate balconies that open into semi-private courtyards, which in turn flow into cooperative gardens and fully public gathering spaces. Residents can choose solitude, casual interaction, or spirited communal activityeach space encouraging a different rhythm of human engagement. Children play while parents share meals. Strangers become neighbors over garden beds. This is architecture as social infrastructure. To reimagine open space is not to think biggerit is to think deeper. To look between, beneath, beyond. It is to ask: How do we shape space to be responsive? How do we design for encounter, for joy, for the unplanned but meaningful moments of connection? Let us not treat the spaces between buildings as voids. Let us see them as vesselsof life, of community, of possibility. Let us design not just for shelter, but for spirit. Let us reimagine open spaces. Mitch Smith AIA, LEED AP is the CEO and chairman of MG2, an affiliate of Colliers Engineering & Design.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||