Tri-State Manufacturers Recognize Customer Retention is Critical

To remain competitive employee training hours have increased as well

In a recent survey of thirty-one manufacturers in the Connecticut, New Jersey and New York (Tri-State) area, customer retention improved 5% from three years ago, to an average of 93.7% this year, compared to 88.7% three years ago. The current national average is 93.4%.

"Customer retention becomes more critical the longer the economic downturn lasts. Tri-State manufacturers face many obstacles today and for the near future, but there still is potential to turn these challenges into competitive advantages," said Mary Ropes, Grant Thornton LLP Assistant Managing Partner, Metro New York. "Whats required, though, is a realization that the manufacturing landscape shifted and that strategic analysis and action taken from a longer-term perspective is required," she added.

Going hand-in-hand with customer retention is providing on-time customer deliveries, where again the Tri-State area showed a marked improvement compared to three years ago, rising from 87.8% to the current level of 89.1%. The national average among manufacturers for on-time delivery is at 91.9%.

Also contributing to customer retention is the importance of employee training and turnover. As training broadens and becomes more strategic with the availability of technology, manufacturers in the Tri-State area devoted more hours of employee training at 81.7% for 8-40 plus average hours, a sharp 15.7% climb from their 2006 average of 66%. At the current 81.7% level, the national manufacturer training average is in keeping with Tri-States figures.

This is not to say that the Tri-State area is not experiencing some of the pressures of the current economy when it comes to employee turnover. The average 11.2% turnover rate, while in line with the national average of 11.1%, deteriorated slightly from three years ago, when the Tri-State turnover rate was at an average of 9.5%.

The data for this study was excerpted from The MPI Groups Manufacturing 2008 North America Executive Summary, based on results from 984 facilities in the U.S., Canada and Mexico.

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