Customer Retention Is a Big Number


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balance sheet okI just overheard a bank president tell a fellow banker that he does not track customer retention numbers because customer turnover is normal and to be expected in their business. Excuse me? This was spoken by a president of a bank which has way too many sales people circulating in the marketplace.

I walked away with the impression that the bank president was lazy. Not ignorant but lazy. It is much easier in his mind to hire new sales people to keep the pipelines filled with prospective customers than to find creative ways to keep and expand the business already under wraps.

I also believe this banker doesn’t understand numbers. The right numbers. The numbers he should understand are these:

  1. How many $ is it costing the company to lose a customer with regard to deposits and loans in house?
  2. How many $ is it costing the company to recruit, train and pay decent sales people who are expected to replace the lost customers?
  3. How many $ is it costing the bank when the dissatisfied customer complains to their social networks?
  4. How many $ does it cost a bank to develop customer loyalty programs based on good solid relationships?
  5. How many $ does it cost the bank when it tries to develop loyalty programs that are not based on relationships?
  6. How many $ does it cost the bank when it fails to uncover the real needs of its most profitable customers?
  7. etc.

It’s a simple profit and loss set of questions. Nothing infuriates me more than to see companies not even put forth a good college effort to delight, retain and honor their existing customers. I still can’t believe that topic is not the most important agenda item on every management meeting docket. What else could be more important when running a business?

Darcie Davis
A career focused on finding the factors that inspire customer/client retention was shaped from, often naively, relentlessly asking questions. I am the founder of HUDDLE Sessions for Women which offer pop-up advisory boards.


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