CUSTOMER RETENTION

 10 September 2022
 MM - Ukrida

Consumer Behaviour 1
Questions to be answered

• What IS CUSTOMER RETENTION

• WHAT ARE THE PURPOSE OF CUSTOMER RETENTION
• WHAT FACTORS DO INFLUENCE CUSTOMER RETENTION

Consumer Behaviour 2
CUSTOMER RETENTION, meaning.....

• Customer retention refers to the ability of a company or

product to retain its customers over some specified period

(Wikipedia, https://en.wikipedia.org/wiki/Customer_retention)

Consumer Behaviour 3
 WHAT ARE THE PURPOSE OF CUSTOMER RETENTION

• High customer retention means customers of the product or

business tend to return to, continue to buy or in some other way
not defect to another product or business, or to non-use entirely
Bad
Good customer
10 10
Customer Retention
New 15
Retention New 22
Retained
5
New 10 10 10 wasteful in
5 resources

5 7
10 10 10 10
5 3
Start Growth Growth Start Growth Growth
To be 20 To be 30 Consumer Behaviour To be 20 To be 30 4
Purpose of customer retention in sales

Basically, there are two types of Sales Strategy:

1. Sales Acquisition Strategy

• Focus on NTB (new to business) customers to expand customer base

2. Sales Deepening Strategy

• Focus on deepening relationships from single to multiple product holdings, to create
customer dependency and loyalty through up-sell & cross-sell. Loyal Customers bring more
profit.

• Sales Deepening Strategy is about CRM (Customer Relationship Management). CRM is

about managing existing customer effectively. This requires Database Marketing
Capabilities.

• Successful CRM could also lead to NTB acquisition through referrals (MGM – member get
member)
Consumer Behaviour 5
Four reasons why sales deepening strategy is important for Business

Common belief in the market…

1. Acquiring new customer is more difficult and more expensive

2. Deepening relationships from single to multiple product holdings

thru up-sell and cross-sell, creates customer dependency & loyalty

3. Loyal customers bring more profit to banks

4. Loyal customers are likely to refer their family & friends

What factors influence customer retention

Perceived value GOOD

PRICE
Customer
Switching Retention
image Cost
Retention are not
Guaranteed to create
Loyalty and repeat
Customer Cross buying Buying.
Trust
Engagement or
Repaat buying

Satisfaction Customers those who are engaged, most of them are loyal
and are willing to recommend to their friends, and generally creating
DS1
repeat buying.
Customer
Intimacy Source : Setiawan, Daud, 2014, Pengaruh Customer Participation
terhadap cross buying intention Melalui customer engagement pada
Consumer Behaviour sektor Perbankan. 7
Slide 7

DS1 Daud Setiawan; 10/09/2022

Benefit daripada Customer Retention and Customer engagement

• Less cost to grow the business.

• Grow business by acquiring new customers 5 times more expensive
than retaining existing customers

Consumer Behaviour 8
TUGAS

PRESENTASI 15 MENIT, MINGGU DEPAN

• KUPAS SATU BISNIS, BISA MELALUI OBSERVASI ATAU STUDI LITERATUR

• Apa Value proposition (atau proposi nilai) dari bisnis yang Anda observasi atau
pelajari
• Apa strategi Anda untuk meningkatkan kepuasan pelanggan?
• Apa strategi Anda untuk meningkatkan retensi pelanggan?
• Bagaimana Anda untuk meningkatkan engagement dari pelanggan Anda?
• What is your target churn rate?
• how many of your target customers are lost each year, what percentage?
why?

Consumer Behaviour 9