Customer Loyalty and Customer Retention. 2 Outline Definition of Customer Loyalty What Affects...
-
Upload
darlene-stewart -
Category
Documents
-
view
249 -
download
5
Transcript of Customer Loyalty and Customer Retention. 2 Outline Definition of Customer Loyalty What Affects...
2
Outline• Definition of Customer Loyalty• What Affects Customer Loyalty• Relationship programs• Customer life cycle• Reasons for Lost Customers• Customer Retention Strategies• Problem Identification and Management• Customer complaints
3
Customer loyaltyCustomer’s commitment or attachment
to a brand, store, manufacturer, service provider, or other entity.
• The ultimate goal of customer loyalty programs is happy customers who will return to purchase
again and persuade others to use that
company's products or services.
4
Customer Loyalty Process”Key Elements
• Ongoing process to capture and utilize the Voice of the Customer1. Listen to key customers2. Understand the messages3. Focus on opportunities4. Take Action
• Using a company-wide model for “Customer Loyalty”– Measures the strength of the customer relationship
• Delivers credible, actionable information and is linked to other key business processes– Strategy development/validation– Customer segmentation (needs based)– Continuous Improvement
5
Brand loyalty
• When consumers become committed to your brand and make repeat purchases over time. Brand loyalty is a result of consumer behavior and is affected by a person’s preferences.
6
Relationship commitment
• An enduring desire to maintain a valued relationship
• Loyal customers, high in repeat purchase behavior and strong in attitude
9
Customer satisfaction
• Customer satisfaction, shown by the difference between customer expectations and buying before purchasing the next performance reaction.
• Ensuring customer satisfaction is a key issue for businesses. Because customer satisfaction creates loyalty.
10
Emotional Bonding
• Brand affect, brand equity
• Company attachment
• Establish feelings of closeness, affection, trust, and respect.
• Needs, wants, desires
11
Trust
• Willingness of customer to rely on the organization.
• Reduces uncertainty/risk
• Honest, fair, and responsible
12
Choice reduction and habit
• People have tendency to reduce choice.
• There can be a switch cost associated with change to the unfamiliar, untried, or the new. There may be cost in time, money, and risk
13
History with the company
• Corporate Image
• Contacts and purchase history
• Service experience
• Intergeneration influence
14
Relationship programs• Customer relationship management,refers to
reliable systems, processes, and procedures that allow companies to better manage customer relationships.
• A successful customer relationship plan can manage all business-related operations and interactions with customers simultaneously.
15
Customer life cycle
ACTIVATION• WELCOME CALLS
• START-UP INSTRUCTIONS
• ADDRESS CHANGES
• ACTIVATION CONFIRMATIONS
SERVICE• OUTAGE AND RESTORATION NOTIFICATIONS
• PROACTIVE SERVICE ALERTS
• SCHEDULING AND CONFIRMING APPOINTMENTS
RETENTION• RENEWAL REMINDERS
• UP-SELL AND CROSS-SELL PROGRAMS
• PROMOTIONS AND SPECIAL OFFERS
COLLECTION• LATE PAYMENT REMINDERS
• FIRST- AND THIRD-PARTY COLLECTIONS
• ACCOUNT RESOLUTION
16
Reasons for Lost Customers• Dissatisfaction• Conflict• Loss of Trust• Cease to need• Novelty Seeking• Too high of a price• Poor product performance• Poor customer service
17
Customer Retention Strategies
• Welcome
• Reliability
• Responsiveness
• Recognition
• Personalization
• Reward Strategies
18
A welcome strategy
The organization’s appreciation for the initiation of a relationship. • Creating a delightful surprise, making a
good first impression• First touch: additional customer
information• Reassure the buyers that they have made
the correct choices.
19
Reliability
The organization can repeat the exchange time and time again with the same satisfying results.
– Keep promise– Ensure consistent quality – Continuous promotion is still the key.
20
Responsiveness
• The organization shows customers it really cares about their needs and feelings.
• Loyal employees create loyal customers. Internal marketing.
• Customer-contacted employees should have the authority as well as the responsibility for date to date operational activities and CRM decision.
21
Recognition
• Special attention or appreciation that identifies someone as having been known before.
• People respond to recognition.
• Recognition and appreciation help maintain and reinforce relationships.
22
Personalization
Use CRM system to tailor promotions and products to the specific customers.
• Offer engine: take customer data after it is analyzed and applies it to create the offer or message that is appropriate to the individual customer.
23
Reward strategies
• Customer reward programs are serious business, and if you want to grow your best customers and reap the benefits of true loyalty, you need an outstanding customer reward strategy.
• A loyalty rewards card program is a good way to start.
24
Problem Identification and Management
• The best of all possibilities is to identify and eliminate problems before they impact your customers.
• Build numerous mechanism for identifying customer problems.– Customer satisfaction survey– Websites, other contacts points
25
Customer Complaints
• Level of dissatisfaction• Attrition of blame• Cost/benefits of actions• Personal characteristics:
– highly educated, – self-confident, – aggressive, – Older women.