BANKING AFFAIRS

Detailed explanation-1: -Loyal Customers Lead To Growth Bain & Company and Harvard Business School report that “increasing customer retention rates by 5% increases profits by 25% to 95%.” Research found that existing customers are 50% more likely to try new products and spend 31% more, on average, compared to new customers.

Detailed explanation-2: -Customer loyalty increases the profits by encouraging repeat business, reducing the operating costs for a business, establishing a favorable price premium, and by generating referrals. To be sure, it is important for businesses to find new customers.

Detailed explanation-3: -Loyal Customers Loyal customers are the most important segment to appease and should be top-of-mind for any company. This type of customers generally represents no more than 20% of a company’s customer base but contributes the majority of sales revenue.

Detailed explanation-4: -Acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.