Customer Satisfaction & Loyalty: Some “Fun Facts”

Most marketers and quality managers know, either intuitively or through direct experience, that customer satisfaction and loyalty is one of the, if not the most, important areas of a company’s operations to focus on and measure.

Most of us know this, but nonetheless, it’s good to look at (or for many of us, re-visit) the numbers. Following are several from Quality Digest, a publication the covers customer satisfaction and quality:

  • A good customer service experience is told to 8 other people
  • A bad customer service experience is told to 22 other people
  • For every customer who contacts you to complain, 26 others say nothing
  • It takes 10 good experiences to make up for one bad one
  • 90% of unhappy customers will not buy again from you
  • However, 70% of unhappy customers will buy from you again if you resolve their problem quickly and courteously.

Here are some more numbers from other various organizations, these on customer retention and churn.

  • A 5% reduction in the customer defection rate can increase profits by 5 – 95% – Bain & Company
  • A 50% reduction in the customer base would occur if left alone over a 5 year period – Bain & Company
  • It costs 6 – 7 times more to acquire a new customer than retain an existing one – Bain & Company
  • An average company loses between 10 – 30% of its customers annually – McKinsey
  • A customer is 4 times more likely to defect to a competitor if the problem is service related than price or product related – Bain & Company
  • 68% of lost customers say they left because they were upset with the treatment they received while speaking to customer service – US Chamber of Commerce
  • Dissatisfied customers whose complaints are taken care of are more likely to remain loyal, and even become advocates, as those that are ‘just’ customers – Strauss & Seidel
  • The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics
  • A 2% increase in customer retention has the same effect as decreasing costs by 10% – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy
  • Customer profitability tends to increase over the life of a retained customer – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy
  • Even in a negative economy, customer experience is a high priority for consumers, with 60% often or always paying more for a better experience. – Harris Interactive, Customer Experience Impact Report
  • 55% of current marketing spend is on new customer acquisition – McKinsey
  • 33% of current marketing spend is on brand awareness – McKinsey
  • Only 12% of current marketing spend is on customer retention – McKinsey


Bottom line? Fairly obvious. Determine the service areas that generate customer satisfaction and dissatisfaction, and then monitor those areas constantly in order improve service and keep customers happy and loyal.