1. Retention Strategies C USTOM ER

2. Course Objectives Explain What is Customer Retention Explain What is Customer Loyalty Describe the Drivers of Customer Loyalty Describe the Various Customer Loyalty Breakers Explain What is Customer Satisfaction Explain Attrition and Silent Attrition Describe the Various Customer Retention Strategies Explain the Determinants of Customer Retention Explain Methods and Tools for Customer Retention Explain Principles of Retention Management Explain What is Customer Lifetime Value (CLV) Explain the Need of Relationship with Customers Explain How to Use Strategic CRM for Retention List the Challenges of Customer Retention Explain the Myths of Customer Retention

3. Introduction This is Hazel Watson. Bran ds Let us look at a few brands that she uses. Hazel always uses ‘Pepsodent’ toothpaste, L’Oreal shampoo and Revlon brand of cosmetics.

4. Introduction Now, think of the first time when she decided to start using these brands. She must have carefully considered all her options and then decided to go ahead with using these brands. Now, she is happy with these brands and so has continued using them for several years.

5. Introduction Hence, you can understand that Hazel is a ‘happy and satisfied’ customer of Pepsodent, L’Oreal and Revlon. Now, if all these three companies were to achieve what they achieved with Hazel, that is, a ‘happy and satisfied customer’, it is very easy for these companies to maintain sustained growth.

6. Introduction This is where the concept of ‘customer retention’ and various strategies related to it come into the picture and are crucial to any company’s success. One of the key principles in sales is that, it is better to keep an existing customer happy and prevent him from going to your competitor brands rather than depending solely on making new customers. Let us learn about customer retention and various customer retention strategies in detail.

7. What is Customer Retention? Customer retention is a strategic process to retain existing customers. It is difficult to exactly define customer retention as it is a variable process. A basic definition could be ‘customer retention is the process when customers continue to buy products and services within a determined time period’. However this definition is not applicable for most of the high end and low purchase frequency products as each and every product is not purchased by the customer.

8. Customer Loyalty and Satisfaction Loyalty is demonstrated by the actions of the customer. But it doesn’t mean that the customer satisfaction level can measure his loyalty. Customer loyalty is not customer satisfaction. Customer satisfaction is the basic entry point for a good business to start with. A customer can be very satisfied with the deal and still not be loyal. On the other hand, a customer may not express satisfaction but wants to remain loyal to the supplier due to some reasons which keeps him benefited from that supplier. For the same degree of satisfaction, the loyalty level may also be different for different suppliers.

9. Drivers of Customer Loyalty It is very important for an organization to identify the factors and facets which drive customer loyalty. These factors help the organization to manage customer loyalty in a better and efficient way. Following are the drivers of customer loyalty: Drivers of Customer Loyalty Attitude Product and Services Technology Human Resources Let us look at each in detail. Supplier’s Culture

10. What is Customer Satisfaction? Customer satisfaction is the measure of how the needs and responses are collaborated and delivered to excel customer expectation. It can only be attained if the customer has an overall good relationship with the supplier. In today’s competitive business marketplace, customer satisfaction is an important performance component and a basic differentiator of business strategies. Hence, the more is the customer satisfaction; more is the business and the bonding with customer.

11. What is Customer Satisfaction? Customer satisfaction is a part of customer’s experience that measures a supplier’s behavior on customer’s expectation. It also depends on how efficiently it is managed and how promptly services are provided. This satisfaction could be related to various business aspects like marketing, product manufacturing, engineering, quality of products and services, responses to customer’s problems and queries, completion of project, post delivery services, complaint management etc.

12. What is Customer Satisfaction? Customer satisfaction is the overall essence of the impression about the supplier by the customers. This impression which a customer makes regarding the supplier is the sum total of all the process he goes through, right from communicating with the supplier before doing any purchase to post delivery options and services and managing queries or complaints post delivery. This helps the customer to form a strong opinion about the supplier which finally results in satisfaction or dissatisfaction. Customer’s perception on a supplier helps the customer choose among the supplier on basis of money, value and how well the delivered products suit all the requirements.

13. ‘Customer Churn’ is the act of losing your customers due to competitive pressure, unhealthy relationships, financial constraints, etc. The average consumer service company experiences between 30% and 70% customer churn annually. Several researches have proven that most companies spend $10 to acquire a new customer for $1 spent in retention strategies. What is Customer Churn? Roll your mouse over the “Did you know?” icon, to learn more.

14. Did You Know? According to the Harvard Business School, increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent. According to 1st Financial Training Services, 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back According to White House Office of Consumer Affairs, a dissatisfied customer will tell between 9-15 people about their experience and happy customers who get their issue resolved tell about 4-6 people about their experience According to a McKinsey Report, 70% of buying experiences are based on how the customer feels they are being treated The following are some important facts to understand the relevance of customer retention: According to a research, 55% of customers would pay extra to guarantee a better service

15. While formulating retention strategies, it is crucial to identify ‘which customers you want to retain?’ This is important because all customers are not equal. Answers to several questions such as which customers to target, how much to spend on saving them, what is the most effective media to use to communicate with them and how best to serve them to ensure that they remain loyal for years to come can be driven by a factor known as the ‘customer lifetime value’. Which Customers to Retain?

16. Determinants of Customer Retention 3 Uniqueness and Suitability of Products Most customers prefer a unique and different product. Identical products normally decrease the probability of selling. Uniqueness in products often increases the demand of that particular product in the global market. More importantly, the unique products should also be suitable so that it meets the different expectations of a wide range of customers. Hence, uniqueness and suitability of products helps in retaining customers to a greater extent.

17. Customer Lifetime Value The following is a formula that can be used to calculate the Customer Lifetime Value (CLV): Where: o (1+i) = Interests o n = Number of Years

18. Need of Relationship with Customers Cost to Serve is Low Growth in Revenue Chances of Getting Referrals Leads to Customer Retention Loyalty Satisfaction Better Customer Perceptiveness Building relationship with customers in current market trends is the most important aspect that an organization should focus on for customer retention. The following are some of the substantial outcomes of building a long-term relationship with the customer: Leads to Customer Retention – Customer retention is a strategic process to keep or retain the existing customers and not letting them to diverge or defect to other suppliers or organization for business and this is only possible when there is a quality relationship between customer and supplier. Usually, a loyal customer tends to stick to a particular brand or product as far as his basic needs continue to be properly fulfilled. He does not opt for taking a risk in going for a new product. More is the possibility to retain customers, the more is the probability of net growth of business. Leads to Customer Retention – Customer retention is a strategic process to keep or retain the existing customers and not letting them to diverge or defect to other suppliers or organization for business and this is only possible when there is a quality relationship between customer and supplier. Usually, a loyal customer tends to stick to a particular brand or product as far as his basic needs continue to be properly fulfilled. He does not opt for taking a risk in going for a new product. More is the possibility to retain customers, the more is the probability of net growth of business.

19. Myths about Customer Retention Customer retention is a crucial factor for organizational success in business. Many companies have misconceptions about customer retention in regard to assessing customer satisfaction in order to enhance business. Following are the most prominent myths about customer retention in the business world: 100 % Customer Retention An organization should endeavor a perfect 100 % customer retention Enhancing customer retention and enhancing organizational profit is equivalent

20. This is a DEMO Course On – Customer Retention Strategies. The Complete Course Consists of 161 Slides 100 Courses Added So far with more than 15,000 Slides + New Courses Added Every Week. This is a DEMO Course On – Customer Retention Strategies. The Complete Course Consists of 161 Slides 100 Courses Added So far with more than 15,000 Slides + New Courses Added Every Week. ManagementStudyGuide.com