#NoBullshitCX #20yearsFuturelab
“Unhappy customers cost you more than you think.”
A customer is worth more than you think. In my previous column, I mentioned the surprisingly high lifetime value of individual customers–once you really get an understanding of the whole picture. The first time I realized was in the early 2000s, when we designed customer experience strategy for a Japanese luxury car brand. When we ran workshops with the dealers to gather their input and discuss our ideas, their initial reaction was quite negative. “We have been selling cars here for a hundred years. Who are you to come and tell us that we are doing it wrong?”Salespeople’s pride was clearly a sensitive subject. So, we asked them a key question. “Dear car dealer, how many cars does a truly unhappy customer buy from you? One, you say? Ok, and how many other people do you think he or she stops from buying a car from you?”Once we framed it like this, the dealers started realizing that an unhappy customer only brings less revenue, but they also cost them money by spreading negative opinions. At the other end of the spectrum, a truly happy customer, who was willing to recommend the brand, acted as a multiplier: bought more cars themselves, and could bring someone else.
The answer, which we found through research, was ‘ one for each car.’An unhappy customer stopped one other customer from buying, and their customer lifetime value(CLV)ended up negative–around minus 1500EUR.A happy customer bought four cars AND stimulated other people over the years to buy one too, ending up with aCLV of over 15.000EUR. Word of mouth is a powerful driver in car sales.
Do you know what the true CLV of your customers is? Ask me for the template to calculate it.
NOTE:
From now on, every Friday, here: Kolle’s column about #NoBullshitCX #20yearsFuturelab
