Love it or hate it, Love Island is currently dominating our screens. And whilst most would struggle to take away an educational lesson from the entertainment program, there is one thing we can look more closely at, the villas residents’ behaviour towards one another.
Recently the girls visited Casa Amor, a villa down the road separating them from their current couplings to meet a new group of boys, whilst the original boys met a new bunch of ladies in the main villa. After 4 days the couples were turned upside down, with one of the favourites to win Michael abandoning his partner Amber for Joanna.
Michael had shared to Joanna his problems about Amber, which he hadn’t expressed before. It came as a shock to Amber to hear about the issues he had and that he hadn’t mentioned them to her previously. Michael had said he had tried to tell Amber but kept getting shot down every time he attempted to bring it up, in the end he kept it to himself.
Relating to This in the Business World
Most customers with an issue will start looking at other businesses without telling their current provider about their problems. Organisations can create this environment when focusing on new customers over their existing client base.
We’ve all been exposed to or heard stories from people close to us who contact their broadband or phone provider about a deal they’ve seen only to find out its exclusive to new customers. It’s frustrating for consumers providing their loyalty to be treated like they don’t matter; hence it’s not great for continuing the relationship and can lead to higher customer churn rates.
Last year, my car breakdown cover provider stopped giving a discount when paying a renewal via direct debit. This meant that my policy tripled in price and they refused to make any other deal. I made the decision to jump ship to another provider who could offer me a cheaper price for being a new customer. However, they also don’t offer any deals to existing consumers therefore to get the best value for money, I will need to switch between the 2 providers year on year.
These companies are either hoping that their existing clients are too content to look elsewhere as they don’t want the hassle of having to research into a competitor and going through the process. Or they are happy in the fact that, like myself, their clients will come back to them every other year.
The Art of Customer Retention
Hubspot reported in one of their articles that it is 5-25 times more expensive to acquire a new customer than it is to retain an existing customer. This is due to the cost involved in marketing to consumers and the time and cost of the sales person nurturing them to buy. Satisfied, loyal consumers are more likely to sing a company’s praises and refer their friends and family, bringing in new customers, free of charge!
Retained customers buy more often and spend more than newer customers. They’ve learned the value of a product or service and keep coming back, again and again. Just a 5% increase in customer retention can increase company revenue by 25-95%.
Companies need to understand what is upsetting their customers and making them leave for a competitor. The organisation should analyse all communication that has occurred (this can be summarised) to identify these issues using reports in CRM or live chat systems.
For example, a business using live chat can set up end categories for the operator to sort the conversation into. This can include the type of chat (sales enquiry, complaints, support etc.), outcome of the chat (resolved, needs following up, unable to resolve etc.). These can be used to see at a glance if there are issues and understand that they need to be investigated, to help prevent high customer churn rates.
This is just one lesson learnt from half an hour of drama from the Love Island villa, who knows what else we can learn with another 3+ weeks to go!
