INDUSTRIAL DISTRIBUTORS COULD SEE PROFITS INCREASE BY UP TO 95% WITH JUST A 5% INCREASE IN CUSTOMER RETENTION
Because B2B organizations have relatively few customers compared to B2C companies, customer retention is a critical component of growth and profitability. Recent research by Bain & Company indicates an increase in customer retention of 5% could increase an industrial distributor’s profits by 25% to a whopping 95%.
To wit, Harvard Business Review says it costs up to 25 times more to acquire a new B2B customer than to retain one.
This begs the question–what is your distributorship doing about customer acquisition? Does it have a formal program whereby it is actively attracting the most profitable customer types? Do you even know what your most profitable customer type is?
Which further begs, what are you doing to retain the customers you’ve already acquired? Do you have formal customer satisfaction surveys? Do you maintain a pulse on the single-most important business your distributorship has, your customers? Do you spend time with your most important customers asking questions about future needs instead of simply putting out fires? Do you lead them in areas where you know they need help, but they haven’t given it proper consideration? Have you made your company invaluable to theirs?
https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
