Most every organization has a strategy for attracting new customers.

But have you neglected to create a formal strategy for retaining the customers you already have? Customer retention strategy is rooted in loyalty. That loyalty is driven, not surprisingly, by what you know about your customers' needs and what you do in response. Businesses that want to be "best in class" focus on understanding the real needs - and intrinsic value - the customer derives from doing business with their company. In years past, brand loyalty - an integral part of customer retention - was often taken for granted. Your grandparents' likely devotion to a brand like Buick may best be summarized as 'Til death do us part." As recently as 1980, 80 percent of U.S. auto purchases were made by repeat customers. But those days are gone. According to CNW Marketing Research, that has plummeted to 20 percent. It begs the question, "What could the automakers have done differently to keep those customers?" By not demonstrating value and appreciation of their customers, those customers fell off the radar - and so did sales. In the meantime, Mercedes Benz has risen to become the number one automaker in customer retention by J.D. Power and Associates. Their customer loyalty premise: High quality and resulting resale value. This is the company that rated even lower than Chrysler several years ago. How can you make that kind of splash with current customers? It begins by rethinking customer engagement to boost satisfaction and ultimately, retention. Get to know your customers. Begin by gathering information about your customers with the mind-set that you will act on it. Ask your customers what's important to them. This might take the form of online surveys, conversations in the aisles or a few questions after a phone order. It might seem like common sense, but make sure you and your staff: y y y y y look at complaints as opportunities engage customers in two-way dialogue survey customers and solicit feedback centralize customer feedback management give customers what they expect - and go beyond simple reward programs

Remember the good old days when the local grocery store owner knew your name? He probably knew the brands you liked and went so far as to set things aside for you. Getting to know your customers is about personal attention and recognition, two key ingredients to strengthening retention. Consider creating a customer advisory board and communicate their recommendations to all customers. Look to past behavior as an indication of future purchases. Consider investing in a simple database or program that tracks customer purchases. You can then use that information to make suggestions based on past purchases and preferences. Employ strategies based on this information. Reward customer retention with membership cards or programs. Offer current customer-only specials and incentives that you communicate via newsletter s, e-newsletters, bag inserts and other forums. Customer retention strategies only work if the customer benefits from them. Make them want to say, "I'm glad I'm in that database because..." If not, they won't use loyalty cards, read your newsletter or respond to your attempts at communication. Communicate, communicate, communicate. Don't stop at welcoming new customers. More importantly, incorporate the use of thank-you communications via letters, calls and e-

Businesses that want to be "best in class" focus on understanding the real needs . without tallying new customer acquisitions. not surprisingly. If you can turn dismay into delight . Reward current customers for attracting new ones. data achievements or anecdotal feedback. Ultimately. What kind of lasting memory and relevance will that leave with customers? Yes. This is definitely taking steps against the all-too-easy tide of temporary "flashes in the pan" . The alternative . Ask about the customer experience and how to make it better . Customer retention strategy is rooted in loyalty. it can be extremely challenging for management to keep retention rates up.and intrinsic value . est customer retention strategies SearchCRM. by what you know about your customers' needs and what you do in response.The customer retention rate refers to the number of customers lost over a period of time.but only if you entice them to be. Expand your relationships by not only upselling and cross-selling to them.com y y y Digg This Stumble Delicious Customer retention rate: -. While there are obvious benefits to keeping customers loyal and maintaining high customer retention rates. important topics and common challenges related to customer retention: . marketing and advertising requires funds. Target your advertising. No measurements = no accountability. And always follow up on them. you need to define what customer retention success is to you. How you measure this is an individual decision -it might be based on transactions. Make it easy for loyal customers to do business with you.you'll only strengthen your relationship. Stay in touch with your top customers regularly. Consider something like a "recommend a friend" campaign that has an incentive for both the new customer and the existing one.leaves room for a competitor that's advertising to gladly step into your place. What's crucial is that you gauge it regularly. It is normally calculated by the percentage of lost customers versus existing customers over a quarterly or annual period. The top 20 percent of your current customers are the ones most apt to be your most ardent advocates .quick fixes like discounts. This guide will explore some of the best customer retention strategies. Make a list and touch base via phone with at least the top 10 to 25 every quarter.the customer derives from doing business with their company.what you hope to have come to mind about your business. Define success.particularly for your loyal customers . That loyalty is driven. Make it clear what your brand is .mail newsletters. Once you know who you top 20 percent of customers are that make 80 percent of your sales.falling off your customers' radars . but also asking for referrals. set marketing tactics specifically for this group.then be prepared to make changes.

He explored employee retention strategies. Which Came First? Here's an excerpt: . "Which is a very dangerous trend. recommendations to others. A 2007 study on customer experience management by the Strativity Group surveyed 309 global executives and found a number of negative trends. One of the major issues? Only 54% of respondents said their company deserves their loyalty. many experts have studied employee retention and how it affects customer retention. The real indication for customer retention is not customer satisfaction. but customers' actions.y y y y y Understanding customer retention Build a customer retention strategy Implementation of a customer retention program How to calculate retention rate Understanding customer retention Those getting started with a customer retention strategy might initially assume that retention rate is based on customer satisfaction. in an article called." Customer retention expert Michael Lowenstein. wallets and relationships is impaired. "They are experience creators in every way that they conduct themselves: clothing. language. While there may not be a direct correlation between customer satisfaction and customer retention rates. Arussy advised this fleet manager to embrace the role of his drivers as the "delivery on the promise" professionals. For example. Customers or Employees." Arussy's advice to this reader was to put in place a retention strategy that supports the customer experience. The infrastructure should include training drivers (or any other employees that are interacting with customers) about their role and how they are being perceived by the customers. "If your employees don't believe in the value of a product or owe you any type of loyalty. several studies have indicated that there is little correlation betweencustomer satisfaction and retention or future purchases. vice president and senior consultant for customer loyalty management at Harris Interactive. Sometimes organizations need to understand that the closest touch point to the customer can help improve customer retention. Repeat business. appearance." Arussy said. Arussy said. Arussy received a question from a SearchCRM. trying to win the battle for customers' hearts. However. founder of Strativity Group Inc.com reader who manages a fleet of truck drivers. Arussy encouraged the reader to create incentives and motivation programs to encourage desired behavior as well as performance evaluations that measure how customers rank behavior. Cowboys and Saloons. agrees that employee loyalty and engagement has a direct relationship to customer marketplace behavior. etc. purchasing ancillary services. willingness to pay premium price and frequency of purchasing are the indicators of customer retention. They are the face of the company and they can help customer retention rates. In one case. These factors can be easily quantified and measured by the dollar value of each action. according to customer experience expert Lior Arussy. Chickens and Eggs. who was wondering about ways to improve the customer experience. only 17% of satisfied customers of financial institutions claimed that they would not entertain a competing offer. meaning they are the action behind the promises and commitments made by the sales force. As Arussy said.

but organizations often don't have enough awareness that what is said to customers. His advice for building a customer retention strategy? First. etc. Gwinner of Kansas State University²have found that employee behavior and advocacy²regardless of the employee's level of satisfaction²have a direct and profound relationship to the behavior of customers. and how. behavioral impact. It is essential that companies have a research and analysis method that links staff performance engagement directly to customer behavior. Gremler of Bowling Green State University and Kevin P. How loyal is our customer base and how can we improve it? Implementation of a customer retention program A road map for implementing a customer loyalty program should include the following. where. recognize and reward employees for how they contribute to customer value. previously neglected criteria are intangible. i. and then build customer experience around it. cost. customers reported an interest in receiving communication from suppliers as long as they could see personal value in each message. it is now becoming well understood that the principal.) or a combination of these two dimensions. there is no standard schedule for how often to communicate with customers to build loyalty. identify what leverages top-end customer commitment and advocacy behavior. how the brand promise is initially communicated and sustained. Employees are capable of directly contributing to both customer disappointment and customer delight. communication. What are the expectations of our customers and what it will take to exceed them? 2. Communication is about relevance and trust. information. and when it is said has an equal. customer loyalty is all about driving perceived value.. train. it's layers of messaging and experience over an extended period. service." Build a customer retention strategy As Lowenstein points out. etc. and also to corporate sales and profitability. two essential elements in the way customers see suppliers."Researchers²including James Oakley of Purdue University. according to Lowenstein: . so they can hire. Northwestern University's Forum for People Performance Measurement and Management and relationship experts Dwayne D. Do we have any customer segments that require different treatment? 6. Customers have grown increasingly skeptical of supplier messaging.e. like lasagna. relationship benefits. with each succeeding customer engagement and contact. quality. brand equity. emotional (trust. as far as this thinking goes. This absolutely requires that the meld between messaging and experience is as seamless as possible. To what extent can we grow our business with our existing customers? 4. but it has to begin with messaging. The excerpt below is from an article Lowenstein wrote called Balancing Messaging and Experience: The CRM 'Lasagna' Recipe for Creating Customer Advocacy: "In CRM. if not greater. products and services. According to Lowenstein's research on customer retention. Largely true. whether that is rational (functional. When considering alternative suppliers or making final purchase decisions." When it comes to getting started with building a customer loyalty strategy. with much of what is tangible seen as one-dimensional and expected. What differentiates our company in the eyes of our customers? 3. How do our interactions with our customers affect their satisfaction and buying behavior? 5. CRM expert Jim Berkowitz advises businesses to use these six questions as a guide: 1.). and grown. emotional. Companies tend to believe that customers gain experience with their enterprises entirely through people. In his research.

convenience. will do that. and a single view of the customer across the enterprise. The key is to analyze the repeats over a long enough horizon. "The difficult part in this equation is determining the right total number of subscribers to use: the ones at beginning of period. For those that don't have access to this kind of quantitative evaluation. etc. Lowenstein recommends debriefing the redeemers and non-redeemers of a loyalty program to find out why they are/are not redeeming and also to determine what else the company can do to build value. Following up with further research once implemented to make certain that the loyalty program's benefits are working. CRM software alone can't guarantee the creation of value -. Consulting firms can help by researching the effectiveness of each element of the loyalty or retention program. and can be represented as: Number of subscribers who cancelled or did not renew during the period divided by the total number of subscribers for the period As Pisello advised. According to Lowenstein. When evaluating the benefits of a customer loyalty program. In most programs.): Responsible for the loyalty programs for many large corporations. a peak.y y y Appropriate research for identifying the benefits. information. thecustomer retention rate is calculated by determining the number of customers lost over a period of time compared to repeat customers over the same amount of time. "A customer is one who continues to make purchases. to desired loyalty behavior. To be successful with a customer loyalty program. and a lost customer is one who has made purchases. Epsilon (formerly Frequency Marketing Inc. or contribution. experts say. or an average over the period. How to calculate retention rate According to ROI expert Tom Pisello." The calculation is: (Total number of customers minus the number of repeat customers) divided by total number of customers In environments where users purchase a subscription.customer centricity. the ones at the end. based on its correlation. Pisello said. Testing them for prospective customer interest and effectiveness. the calculation is easier. a high percentage of customers do not take advantage of loyalty rewards." . companies need to consider whether they will buy an off-the-shelf vendor program or develop a homegrown program. but does not repeat these purchases for some time. Lowenstein pointed to two resources for off-the-shelf loyalty programs: y y y y The Loyalty Guide: An encyclopedia of loyalty program information published by The Wise Marketer. rely on both tangible and intangible (service. CEO and President of Alinean.) components. y CRM software can help support customer retention programs if the system captures all customer interactions in a database.

Inc. y Ask the Expert: Customer loyalty Ask SearchCRM. Lowenstein said. managing or understanding customer loyalty in your organization. B2B customer deflection models may be somewhat more challenging. several consulting and database management companies have succeeded in creating them. More resources for developing customer retention strategies y Customer loyalty case studies and industry-specific strategies This section of the Customer Loyalty Learning Guide provides a look at successful businesses that have implemented customer loyalty programs and examines innovative strategies and industry-specific challenges. To measure this. read the full definition for customer lifecycle and find out about a matrix developed by marketing analysts Jim Sterne and Matt Cutler that breaks the customer life cycle into five distinct steps. AIM. recommends that companies look for this functionality when evaluating CRM solutions. Performix. purchasing. ACD or CTI solution handling contact routing and reporting. even though it is unlikely to be the differentiating factor.Some companies can measure retention rate using their CRM system. since some companies have long-term arrangements with customers. founder and president of Strategic Contact. such as your quality monitoring system. In this article.." Bocklund said. and maintaining loyalty to a product or service. because of the greater likelihood to have missing or incomplete 'firmographic' variables.com's customer loyalty expert Michael Lowenstein a personalized question on measuring. and Merced offer these types of tools. Companies like Witness. y Customer loyalty quiz . However. y What is customer life cycle? Customer life cycle is a term used to describe the progression of steps a customer goes through when considering. since any of the vendors with solid sales modules should offer this capability. according to Lowenstein. Customer service expert Lori Bocklund. some companies combine data from the CRM system and data from other systems. "You can also consider performance optimization tools if you want to combine things like save rate with other key performance indicators for an overall scorecard. using. It can depend on the industry or the type of business. There are no hard and fast rules on calculating customer defection and customer retention.

With this type of promotion are we not just pushing current customers and clients to seek services elsewhere when their contract ends? Perhaps we need to rethink our marketing and sales strategies. With these statistics I am wondering why most marketing and sales campaigns are designed for the new customer.com Predictive ModelingBig Data yields Predictive Modeling Learn about Analytics through R. That has all changed now. coupons. However. We shopped in our neighborhood shops and our corner grocery stores. afterall many experts will tell you that it's five times more profitable to spend marketing and advertising dollars to retain current customers than it is to acquire new customers.com Guide See More About: y y y customer relations relationship marketing crm Sponsored Links Customer Relationship BPOThe One-stop-shop for All Customer Management Solutions. but in today's business world it's necessary. Just like the corner grocery store owner kept information on 200 customers in his head.y This quiz covers common customer loyalty terms. Establishing a detailed client database will allow these companies to keep track of personal information and individual preferences of all their customers. and customer referrals. so embed your campaign with value.StarTek. where you are known by your email address. In years past the importance of focusing on customer retention was not as important. related technology and best practices for retaining customers. 05 May 2008 Explore the Value of Customer Retention By Laura Lake. there is a solution.com/customerrelship Customer AcquisitionLower your cost of acquisition Measure your campaign ROIwww. About.Dataspora. We had a personal connection with our service providers and the thought of shopping at another store would have never crossed our minds. Can someone please explain that methodology to me. Take for instance the wireless telephone companies. stickiness came naturally. Your customers have been inundated with meaningless "junk" mail and email spam. the large superstore can now keep track of 20. repeat sales. and newsletters will be discarded. and will be able to work successfully towards increasing customer retention. If you are a current customer you have the privilege of paying full price. customer loyalty has disappeared and large corporations and virtual storefronts are unable to ask the millions of disloyal customers what caused them to stray. special offers. This enables them to provide better service and value. This is especially true when you remember that 80% of your sales come from 20% of your customer and clients. companies will be able to re-establish contact with customers.and learn new things -. To achieve the objectives of the database and customer retention programs. The exercise will only be effective if the customer recognizes and associates some value with being part of your database.direxions. Not to mention that now we have the convenience of the Internet and do a large portion of our shopping online. Find out how much you know -.000 customers through its customer database. Sophisticated technology and database equipment has made it possible for specialized firms to make attempts at customer retention through database marketing programs. the majority of the sales personnel don't know that you even exist. if you sign a new contract you are given a large rebate or even a free cellular telephone. With effective implementation of customer databases. A few value-add strategies that you can use include: . the entire campaign should be designed and carried out with the customer in mind. Contact Us!www. If they do not perceive value in your program all of your communications.com Marketing Ads Marketing StrategiesBusiness MarketingMarketing ManagementReading StrategiesE Marketing Customer retention is not only a cost effective and profitable strategy.about building customer loyalty. As a result. Our stores our larger.

and reduce the costs of marketing and client service. Getting and keeping customers is the main function of the business. Its important not only to get new customers into your business. Relationship Marketing extends to include Inbound Marketing efforts (a combination of search optimization and Strategic Content). thank you statements. [1] Once simply a label for a category of software tools. you may not reach the goal. Remember. people. processes. and technology work in synergy to increase profitability. not profit making. widely-implemented strategy for managing and nurturing a company¶s interactions with clients and sales prospects. The overall goals are to find. Relationship Marketing is a broadly recognized. When an implementation is effective. Making profit is actually the goal of the business. sales recognition. It also involves using technology to. As a practice. attract. synchronize business processes (principally sales and marketing activities) and most importantly. Event oriented communications in which the customer is genuinely interested. and technical support. Relationship Marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction. and reduce operational costs. after sales. PR. . today. Just like Customer relationship management(CRM). organize. Relationship Marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. But Customer Service is just a programm of total customer satisfaction program. Enhanced and empowered customer. So now we can understand that Customer Service means more Customers and more profit. discounts. rather than a dominant focus on sales transactions. Relationship Marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. automate those marketing and communication activities on concrete marketing sequences that could run in autopilot (also known as marketing sequences). After sales satisfaction and complaint inquiries and surveys. entice former clients back into the fold. but to focus on getting the new customers to comeback again and again. Social Media and Application Development. Welcome. This includes tools for managing relationships with customers that goes beyond simple demographic and customer service data. and win new clients. or preferential treatment. If you confuse the function with the goal. With the growth of the internet and mobile platforms. acknowledgement. Planning a service strategy goal to build long term relationships with your customers. it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond.y y y y y Membership cards and programs that entitle your customers to special offers. nurture and retain those the company already has. experts says winning in this arena means winning the customer and that only means profit.

And a key to getting and keeping Customer. Other areas such as production. Womenswear. Homeware. excellent service will compensate for other copetetive problems like pricing. But go many cases.scribd. Books. You¶ll also have the opportunity to learn about practical ways to utilise data profiling. With the benefit of their considerable experience. are vital. Activewear.Cosmetics.Music. for gold medal service 2. Kidswear. customer segmentation and the creation of emotional bonds to create increasingly productive retention communications. Fragrances. Service alone witt not make a business successful. Practicing 'total customer satisfaction program training' to all of your people in your business/ organization. etWinning new customers is important« but retaining them is critical to the financial health of your business.scribd. they will show you how to develop retention strategies and employ retention tactics that will help you and your organisation to maximise ROI opportunities regardless of the current market conditions. Jewellery.com/doc/22371354/Management-Thesis-of-CustomerPerception-on-Pantaloon http://www. 1.com/doc/19186425/Pantaloon-New-Proj Pantaloons is the company's departmental store and part of lifestyle retail format. for easy achieving of long term goals! http://www. business location. Stationery. In just two days we¶ll show you how to develop a solid retention strategy. The course is delivered by a number of practitioners regarded as among the direct and digital marketing¶s elite.. Toys. The Stores have entire range ofMenswear. focusing on your retention strategy makes perfect business sense. based on the value of the customer. for a sustainable business process 3. Novelties. Accessories. In a short time Pantaloons has been able tocarve a special place for it self in the hearts and minds of theaspirational Indian customers. and integrate it into your long term business planning. And as it costs considerably less to retain a customer than it does to win a new one. In fact. Gift. . advertisement etc. PRIL took its very initial steps in theretail journey by setting up the first Pantaloons store inKolkata in 1997.

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