“Gratitude is not only the greatest of virtues, but the parent of all the others.” Cicero
Every one of us wants to feel cared about – and this basic need applies across all areas of life. We want to know that we matter, that we make a difference. That we are seen by and acknowledged by those we interact with regularly. As the Cicero quote above implies, gratitude is not only our top indicator of excellence, it’s a prerequisite to moral and ethical conduct.
Gratitude combines emotion and behavior – we experience a feeling of appreciation and then express it through some kind of action. In business, gratitude can serve as the foundation of a customer relationship that goes beyond a transaction. It’s about emotional connection.
Proving your gratefulness to a customer for their business is the crux of a customer appreciation strategy. Harvard Business Review explains why a strategy matters: “On a lifetime value basis, emotionally connected customers are more than twice as valuable as highly satisfied customers. These emotionally connected customers buy more of your products and services, visit you more often, exhibit less price sensitivity, pay more attention to your communications, follow your advice, and recommend you more – everything you hope their experience with you will cause them to do.”
Feeling valued creates a measure of happiness, and happy buyers are more likely to spread the word about your company, as well as to continue purchasing from you. They help build your brand’s reputation.
Here are just a few facts that show the benefits of having a strategy to honor your customer:
- 70% of buying experiences are based on how the customer feels they are being treated.
- A typical business hears from 4% of dissatisfied customers; the remaining 96% don’t voice their complaints to the business. And 91% of those customers never come back.
- News of bad customer service reaches more than twice as many ears as praise for a good service experience.
- By far, the most requested improvement from customers was “Better Human Service.”
- Probability of selling to a new prospect: 5-20%. Probability of selling to an existing customer: 60-70%
How does having a customer appreciation strategy help you?
Happy customers mean new customers.
The best method of growing profitably is to win new customers without a substantial investment of your resources. This is where word of mouth comes in. Happy buyers want to share their appreciation for being treated well as customers. Word of mouth is influential and persuasive.
Happy customers may be a source of product innovations.
Satisfied customers are more willing to share their product use experiences, which can be vitally important for product innovations. In fact, customer input in the early stages of product development has been recognized as one of the leading reasons for the product innovation success.
Repeat buyers means lower costs.
Competitive strategies for retaining existing customers tend to be less expensive than those for gaining new buyers. With repeat purchase, the cost of doing business with happy customers goes down, exponentially. Further, one dissatisfied customer takes the profitability out of five happy customers.
Customer happiness means sales of your other products.
Satisfied customers are more apt to buy other products and services from you, because the emotional connection you’ve established makes them trust you. You’ll be better able to expand your product lines and see growth without heavy risk.
Happy customers mean a price advantage.
Unless they see a strong incentive to defect, happy customers are unlikely to leave. Customer happiness ranks among the best sources of insulation against your competition. The larger the satisfied customer base you own, the greater the amount of entry barriers for your competitor.