Customer satisfaction is important to our company. Taking care of our customers is the right thing to do. It is also an important way that we use to gain more higher profit business. The cost to advertise and acquire a new customer is so high that we would not be in business if we had to acquire a new customer for each order. We track several different metrics that allow us to see how we are doing. We also collect data on our performance that we use to improve our products and our service. It is true if you don’t take care of your customers, your competitors will. I will discuss below the ways that we track data and how we use it to make decisions. One thing to keep in mind is the goal is never 100% satisfaction. There are some customers that make themselves too costly to satisfy. We will go the extra mile but not the extra thousand miles.
We begin by acquiring most of our customers through pay per click advertising. This is expensive and highly competitive. The cost to acquire a new customer varies but is around $50. Yes, that means if the customer spends less than $50 we’ve lost money on that transaction. However, here is where it gets interesting. If that same customer comes back and purchases again there is a good chance we will make money.
Around 38% of our revenue is from repeat customers. These repeat buyers are extremely important. Without them, we would be spending an additional $50 per customer needed to replace their revenue. These repeat customers also tell their friends and family about their experience. These are our Promoters.
They say word of mouth is the best advertising. It is true that our customers advertise or promote us. We track our promoters through our post order surveys with one simple question. We ask: “How likely would you be to recommend our products to a friend or colleague?”. The customers then rank their likelihood on a scale of 0 to 10. Those that rate us 9 or 10 are Promoters. Scores of 7 or 8 are passive and 0 through 6 are considered Detractors. We then take the percentage of customers who are Promoters and subtract the percentage who are Detractors. Currently our score is around 74%. The score is important but more important is the trend. As you can see our trend is relatively flat over the last 7 months. It is important that as we continue to grow quickly that we maintain our promoters. These customers are helping us build the business for the coming years!