“A company’s primary responsibility is to serve its customers, to provide the goods or services which the company exists to produce. Profit is not the primary goal but rather an essential condition for the company’s continued existence.” – Peter Drucker

We found so many great studies on the return on investment of customer excellence I’ve decided to write a third column. This column will further define the value you are missing out on if you do not have a customer excellence program in your organization.

If you are still not convinced that a customer excellence program is the best place to start your improvement efforts, read on …

In our first column, we looked at how Philips Electronics outgrew their competition by almost 10 percent when their Net Promoters Scores were higher than their competitors. We also looked at how a bank’s “promoter” clients were worth $9,500 more to the bank than their “detractor” clients. We saw how British Gas decreased bad debts by 90 percent and increased growth rates by 30 percent as they moved their Net Promoter scores from 45 percent to 75 percent.

In our second column, we learned that for every 1 percent of customers that become repeat buyers, revenues can increase by 10 percent. We reviewed a Harvard case study showing how credit card giant MBNA increased profits 16 times by reducing customer defections by 10 percent.

What is evident from our research is that repeat customers are your key to decreased marketing spend, increased revenue and increased profit.

Here are some stats to support how your customer’s experience drives repeat purchases and their likelihood to recommend you to their friends and family:

According to a study by Temkin group of over 15,000 U.S. based customers:

Eighty-one percent of promoters were very likely to purchase again from the company versus only 16 percent of detractors and 44 percent of passives.

Sixty-four percent of promoters recommended the company to others versus 24 percent of detractors.

Did you know that you and your company are going to screw up? Yep – it’s a guarantee.

What happens to your deep personal relationships when you goof something up and sincerely apologize? If they believe that your apology is sincere and your relationship is a trusted one, they give you grace and forgive you.

Forgiveness doesn’t happen if your customers don’t have a trusted relationship with you. The same study found the following:

Sixty-four percent of promoters were very likely to forgive the company if it made a mistake.

Only 11 percent of detractors would forgive the company.

Your customer relationships are just like your personal relationships. You’ve got to be making deposits into their “relationship bank” so that you will be ready when mistakes force withdrawals. Trust me, withdrawals will be made. Make sure your customer relationships are ready for the withdrawals.

I could go for days on studies, surveys and examples of how excellence in your customer relationships makes your company more profitable, grow faster and a much better place to work. I’ll stop here for now …

Are you ready to get started?

Curt Fowler is an organizational growth expert and president of Fowler & Company, a business advisory firm dedicated to helping leaders create and achieve a compelling vision for their organization. He has an MBA in strategy and entrepreneurship from the Kellogg School, is a CPA, and a pretty good guy as defined by his wife and four children.

Have a business growth topic you’d like me to cover? Send suggestions to cfowler@valuesdrivenresults.com.