Customers expect more from businesses today than ever before. If you’re an owner, you’ve seen that in action: A customer whips out a phone to tweet or text about an experience, perhaps even as it’s happening. What you may not have seen, however, is just how much that one encounter can affect your ROI, or return on investment.
How Does Customer Experience Affect ROI?
Customer experience affects ROI because it affects profits. Happy customers spend more money, act as brand evangelists and return to your business more often. Unhappy customers obviously don’t do those things — but their impact doesn’t stop there.
Let’s start with the good news:
Good customer service is the single most important factor for consumers in developing a relationship of trust with a business. In fact, 42-62% of consumers return for a second purchase after having a good customer experience.
When customers are dissatisfied, however, they tend to be more vocal. A customer who has a negative experience:
- Is highly likely to share that experience by leaving a bad review,
- Will typically tell 9-15 other people about that experience, and
- Won’t do business with the company again 91% of the time.
That’s bad for your brand, your bottom line, your ROI and your company morale.
How Far Can One Bad Review Really Go?
Farther than you think. Inc. found that it takes roughly 40 positive customer experiences to undo the damage of one negative review.
You can read how they came to that conclusion here, but the gist is that:
- Unhappy customers leave reviews far more often than happy ones, and
- Ratings are calculated as averages, so
- One bad review can easily tank your rating.
How Does A Bad Review Affect Profit?
ROI is hard to measure, so we’ve developed a calculator to show you how much one dissatisfied customer can cost.
Say your business has 15 locations and your average annual revenue per customer is $125. If you have one dissatisfied customer who walks out of your business each month, that can create an annual loss of $22,500. That means one unhappy person equals weeks or months of advertising down the drain.
How Do You Fix It?
The execution isn’t simple, but the solution is: Create better customer experiences. Make sure you have a way to find out when problems arise, and respond quickly when they do.
With Retention360, all of that is built in. When a customer has a problem, they scan a QR code displayed in-store to leave their feedback. The Retention360 platform prioritizes that feedback (positive, negative, or neutral) and alerts your team so they can address it ASAP — sometimes right on the spot. If you need to, you can also follow up via text, email or call.
Why Does It Work?
Because your team not only gets the opportunity to fix a customer’s bad experience on the spot — they get the opportunity to turn that experience into something positive. Loyal customers are made one personal, positive interaction at a time. It’s up to you to make those interactions happen.
Contact us to learn how we can help you start doing that today.