fo} N CUSTOMER Retention Strategiesfos Tae Etro process to retain existing Rema ee aR clay CC Tua Ua ay PRE eee rs COC Mug PRR e ele SLi eae TG CTS U Cesare ALU mee (oi Ey yo) ele ema) end and low purchase frequency Pele ace ee ea product is not purchased by the customer.oe ee ee What is Customer Loyalty? Loyalty also means that customer sticks to the supplier on certain grounds though he may be having other options also. It may be possible that the supplier may not have the best product or the customer may have some problems with the supplier, in respect of his supply of the product but the customer likes to ignore other options and prefers to continue with the same supplier as the customer thinks the supplier provides him more value and benefit than others. Such loyal customers tend to spend more money, buy more, buy longer and tell more people about the product or supplier. This type of long-term customer loyalty can only be created by making the customers feel that they are the number one priority with the supplier.Drivers of Customer Loyalty Acustomer to bear on his loyalty can have following . types of attitude: Drivers of Emotional and sentimental - Customer Loyalty Some customers stick to a particular supplier due to the emotional and sentimental attachments with that supplier. This attachment may be due to the physical Entrepreneur Type - These types of location of the supplier, customers have a habit to try new options. Their decision to choose a supplier is normally irrational and can change their loyalty to other suppliers even if they are satisfied with existing customers. product pattern provided by the supplier that exactly suits the customer or may be due to the esteemed assistance and services provided by him Rational Type - Such type of customer makes purchase decisions rationally. Before making any purchase, they evaluate the suppliers and assess the profitability criteria.What is Customer Satisfaction? SATISFACTION, = wow! |Roll your mouse ovet the “Did you know? icon, to learn more. eT rel eR Uomo losing your customers due to Tole laleLae] th C8 1c S10 Tiel ANAL le financial constraints, etc. See Roa Ra Teel aoe Ceci} Lae Atl customer churn annually. SCC ORIN od PUR aes esol sl spend $10 to acquire anew customer for $1 spent in cellu delice(=n A = = Ll ne Which Customers to Retain? 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, NR Coste alot) RoR Roe eRe EIR areas cok TLa RUC} la icoR are a aca necln ole Neciene Rss Ren te Nun) factor known as the ‘customer ttt) Leee | Determinants of Customer Retention Delivered Quality of Products and Services versus Customer Expectation The worthiness of a particular product or service does not depend on its own merits. It is only worth and useful if it meets all customers’ expectation. If the customer expectation is very high and the provided product or service does not meet his expectation then the customer will obviously not purchase that particular product again. Hence, one of the key facets in determining retention is the difference between the ‘quality of the product or service provided’ and the ‘customer’s expectation’. The organization must always try to optimize the balance between quality of product and expectation from customers.Customer Lifetime Value The following is a formula that can be used to calculate the Customer Lifetime Value (CLV): = — Future Value resent Value = ———___— (1+ i)” ° Where: o (4+) = Interests Oo w= Number of YearsNec] _— Nea 128 yd Kei eS ES MB eo Soe.an . ie! J me LJ | a! a i Strategic CRM for Long Term Relationship with Customers The aim of strategic CRM is to concentrate and enhance the knowledge about customers and use this knowledge to improve and customize the interactions with customers to maintain a long-term relationship with them and for customer retention. NK Contact Relationship Management eSee ee ee ee ee ee Challenges of Customer Retenti ED BSD BB DD I I I arene) ea elem Umea ana lmeliclrc lela leon Mol Cl ee kel ole ney, and above all, hig! ing loyalty levels in customers even where satisfaction is ly high