So, for years the old rule of thumb meant that acquiring a new customer costs more than retaining an existing one (roughly 5 times more). The cost of acquiring customers today is so industry and channel specific that I don’t believe we should even talk about averages any more. However, it still costs more to get a new customer. It’s definitely better to retain your loyal ones, unless they are the ones actually costing you money, which I believe some of you have also experienced. Some customers just take up so much of your time and don’t bring proportionally enough value back.
And it’s always about value.
If a customer is valuable for your business, of course you will do anything to keep him happy. You don’t want to lose them to competition, even if it means getting them a discount now and then, or spending some more time on their demands.
Why don’t companies treat their employees as well as their customers? Do managers really believe that it is easier to find new employees than to find new customers? The pool is limited in both cases.
The employees often don’t feel appreciated enough in their companies, they don’t feel listened to and they don’t get a chance for promotion even if they know they deserve it after years of good work. It’s not an easy job on both ends. From management it requires special attention and continuous work, as well as listening and knowing what changes to implement to keep the employers sincerely happy.
Nevertheless, it’s also often about the pay. Which is the simplest thing an employer can do, raise the pay and the employee will not leave. Or, fire the employee and find another who will work for the same pay.
Is the hiring process free of charge? No, neither in terms of time, nor money.
How many hours do they spend recruiting a new potential candidate?
How many hours do they spend interviewing the candidates?
How many hours do they spend onboarding the new employee?
How many hours will it take until they are on the same level as the one who just left the company?
Have they really saved that much money? Isn’t it easier to raise the pay for the employee who you’re satisfied with and who already brings you enough value?
Would a company stop doing business with a valuable customer just because they would ask for a discount after years of buying your goods or services? Well, maybe they would, but let’s say that wouldn’t be a wise business decision.
More companies should think about treating their valuable employees more like they do their valuable customers. Both are equally important for success.
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