We previously covered the cost of loss of new market share and new business growth by not keeping pace with the new communication tools of social media in The Cost of Not Entering into Social Media – How it Hurts Your Company (Part One). Now we need to cover even a cost that is potentially more devastating to your company – the loss of your existing customer base.
In a challenging economy, it is not only important to grow your customer base, but to retain your existing customers. Perception is one of the leading factors that play a central role in customer retention. Perception of your goods and services, customer service, methods, practices, are all formed by your clients, and thus their opinions and decisions. If the perception of your advertising, communications, website, and public relations is out of date, or old-fashioned, that typically translates in how they perceive your business. Your website and online communications are now typically the first point of contact now that a customer has with your company. This includes your existing customer.
Being out of date is not the worst association that will be felt by your company, what is worse is that you will be seen as out of touch with your customers! Customer’s that perceive you as out of touch also think that you don’t care about them, and that, according to a Rockefeller Corporation Study, is the number one reason cited by customers that leave the current company they are doing business with.
At Sterling Cross Communications (www.sterlingcrossgroup.com), we offer and perform an in depth survey and perception check of our client’s customers called checking the Pulse of the Customer. In this process we speak with a few of our client’s biggest customers, a few of their most recent customers, and if possible, with two customers that chose not to do business with them. Our own work this year has proven out the theory that many clients are not paying enough attention to the perception of them in the market. One of a client’s largest customers was considering leaving them because of a perception that they were out of date and weren’t going to be able to keep up with them as they were about to experience a major expansion due to a merger.
We also were able to help our client’s understand that the conversation about their company, for good or for ill is happening every day online, and that through incorporating Social Media, they can start engaging customers in that conversation. The cost of not participating continues to become crystal clear.