I got into a conversation with a couple of accountants a while ago who proceeded to complain to about the “cost to serve” of some of their customers. From what I could gather they were making reasonable margins from these customers, but yep you guessed it ---- it wasn’t enough.
I’m not sure what they didn’t get because anyone with half a degree will tell you that the most money you are likely to make will come from your current loyal customer base. US based Qualtric XM who measure this type of thing will tell you an existing loyal customer is 5 times as likely to repurchase, 5 x as likely to forgive, 4 x as likely to refer and 7 x as likely to try new products.
Analysis also shows that selling to a current customer is 60% - 70% more likely to happen compared to selling to a new client at 5% - 20%. Oh and protecting customer retention can increase your profit by 25% - 95%.
Whether the accountants I met believe this or not, the cost to serve loyal customers is nothing compared to the value they return to us. And it’s significantly cheaper than the alternative.
So the next time your Accountant hits you with something like this, don’t lose it like I did. Just refer them to my post or get them to give me a call.