Steve Walker discusses the value of customer retention with Brad Linville and Jeff Marr. They discuss ways to optimize opportunities with customers and touch on the topics of sole sourcing, misallocation of resources, share of wallet, and innovation.
Is one loyal customer the same as another? Simplistically, you could say that the customers we retain are loyal, while those who buy elsewhere aren't. But this doesn't tell us enough about customer retention. The fact is not all loyalty is alike, and some forms of it are better than others.
When a company loses a customer, especially a key customer, you can generally expect them to take action even to the extent of formalizing a strategy to win the customer back or at least to understand why they left. Understanding from customer loss leads to improved understanding across the entire customer lifecycle.
The legendary business professor, Peter Drucker, once wrote the true objective of business is to "attract and keep customers". He makes it sound pretty simple, doesn't he? Well, if it's that simple, then why do so many companies still struggle to achieve retention goals, lose major customers annually, or fail to grow the bottom line – all without any systematic improvement to their business models?
