Preventing customer churn. Pitney Bowes white paper

Business owners of all types know that trying to win new business can be vastly more expensive than retaining existing customers.

Nurturing existing customers not only provides stability but can also lead to impressive growth. Infotrends quotes that a 5% growth in current customer business can equate to as much as a 50% growth in bottom-line profits.

In the business-to-business arena, firms are often fighting in highly competitive, commoditised market places. Any period of economic downturn forces business owners to consider their costs to a greater degree, and makes customer-churn more likely than ever.

It is therefore essential for firms of all sizes to protect their customer base, and with it the short-term viability and long-term growth prospects of their business.

Pitney Bowes’ recent survey of business directors/managers across Europe and the USA demonstrates the B2B sectors most at risk from customer churn and those providing a greater degree of stability. Perhaps more importantly it also outlines the reasons why these decision makers choose to change suppliers.

According to the survey, these are largely centred on two themes:
• Poor customer service and product/service delivery
• Poor communications, anywhere from asking about customer needs, to product updates to simply keeping in touch

Understanding these two themes and formulating a plan to deal with them should therefore be considered a vital part of any firm’s overall business strategy.

Key findings

• Poor customer service and poor communication are cited as the most common reasons for switching supplier
• Office Supplies companies and mobile phone operators are most at risk of customer churn
• Water companies, PR firms and lawyers experience the least churn
• Businesses find it difficult to grow without a stable customer base, but the technology is available to enable firms of all sizes to communicate effectively and retain their customers

Download the white paper in full by clicking the link below.