What can lost customers do to your bottomline?

I am back with some more customer mathematics.

In my previos post on the subject I had talked about how satisfied customers can increase your sales without your spending even a single penny. Well, today lets talk about what your dissatisfied customers could be doing to harm you? You can be rest assured that they would be talking negatively about you to the very same prospective customers, whom you are wooing with your expensive advertising and marketing campaign.

Research shows that one dissatisfied customer will, on an average, talk negatively about you to twelve potential customers and turn them off from dealing with you. This is the basis of the next Customer Math formula 1=12 which states that one dissatisfied customer will talk negatively about you to an average of 12 potential customers. What more. Some of these 12 potential customers could, in turn, talk to their friends and associates. A alarming situation for any business.

Let us again take the example of the company with 100 customers that we have discussed earlier. We assumed that on an average, we lose 25 percent of our customers. As such, this company would lose 25 out of the 100 customers that it has. According to Customer Math, these 25 dissatisfied customers will talk negatively about you to 300 (25×12) potential customers. We have a huge business loss staring at us. That’s not all. Just imagine how our resources are being wasted. We have been spending money on advertising and marketing to acquire new customers. We have probably succeeded in even persuading some to think about buying from us. Guess what happens? These hot prospective customers meet some of our dissatisfied customers and all our investment in advertising and marketing goes down the drain!

The upshot of all this is: beware of a dissatisfied customer. She has the potential to hit you where it hurts the most-your bottomline. She can ruin your business and you wouldn’t even know where the blow came from.

Now I hope you will agree with me that we should not lose even a single customer. Apart from the difficulty and expense involved in replacing the lost customer with a new one, there is the danger of my losing 12 potential customers who come across my dissatisfied customer, and listen to her woes.

I have had a case where a dissatisfied customer even took away one of my very satisfied customers. The negative word-of-mouth of a dissatisfied customer is lethal for your business. So just keep your customers happy.

More mathematics next time.

Avinash Narula

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