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Edit Comment Close Premium member Presentation Transcript CUSTOMER RETENTION AND LOYALITY: CUSTOMER RETENTION AND LOYALITY SUBMITTED TO:- MR.SUDHANSHU KHATRI SUBMITTED BY:- TANU TAYAL NEHA ROHILLA CUSTOMER RETENTION: CUSTOMER RETENTION Customer Retention is the activity that a selling organisation undertak in order to reduce customer defections. Successful customer retention starts with the first contact an organisation has with a customer and continues throughout the entire lifetime of a relationship.WHY CUSTOMER RETENTION IS IMPORTANT?: WHY CUSTOMER RETENTION IS IMPORTANT? Good customer retention is vital to any organization because a slight reduction (5%) in the customer defection rate has a disproportionately positive effect on profitability. Companies with high retention also grow faster. However, customers can only be retained if they are loyal and motivated to resist competition . DETERMINANTS : DETERMINANTS There are seven determinants of customer retention: 1. Customer expectations versus the delivered quality of the product or service 2. Value 3. Product uniqueness and suitability 4. Loyalty mechanisms 5. Ease of purchase 6. Customer service 7. Ease of exit (lock-out provisions) : 1. CUSTOMER EXPECTATIONS VERSUS DELIVERED QUALITY Customers do not simply evaluate a product or service on its own merits. They evaluate it relative to their expectations. Raising expectation levels generates trial, but overly high expectations contribute to low retention. A firm must strike the optimal balance between expectations and delivered quality.Slide 6: 2.Value Here, we define value as quality divided by price. A firm can provide greater value either by offering higher quality and matching the competition on price or by offering the same quality at a lower price. From a customer equity perspective, firms should trade off the potential price premium against the risk of customer defection—and the resulting loss of substantial retention equity.Slide 7: 3. PRODUCT UNIQUENESS AND SUITABILITY The more different (or less substitutable) a product is, the greater the retention rate. Just as the use of "acquisition products" is important in obtaining new customer assets, so too companies should ensure that their product portfolios contain "retention" offerings that customers can trade up to as they proceed through their life cycles.Slide 8: 4. LOYALTY MECHANISMS Loyalty mechanisms can generate high retention rates even when competing products or services a Target, a mass discounter, entices customers to use its credit card by donating 1 percent of their purchases to education. Such loyalty mechanisms, which link usage and rewards, can become very powerful generators of retention almost identical.Slide 9: 5. EASE OF PURCHASE Some products and services are very difficult to find or purchase, which hurts retention. For example, a customer will not regularly buy a specialty brand of stocking if it is not widely available, even if the product is highly differentiated. Ease of purchase is not only a consideration for retail companies; manufacturers of specialty industrial components also need to make sure that their products are easily available to buyers.Slide 10: 6. CUSTOMER SERVICE In some recent studies, customer service was the most important determinant of whether or not a customer would defect from a firm. But defining customer service is not as easy for a company to do as it may seem. Customer service opportunities are pervasive in any organization. Some companies have customer service representatives who are responsible for handling all customer problems. Other companies decentralize the process.Slide 11: 7. EASE OF EXIT Exit barriers offer one strategy for increasing retention. Examples of these barriers include programs that reward continued use based on historical usage; product-design characteristics that make it difficult to change suppliers; and product-learning curves that make it costly to switch to competing products. 9Cs of Client Retention: 9Cs of Client Retention Follow these 8 Cs for Client Retention to avoid the 9 C – Cancellation: 1. Communication 2 . Convenience 3. Choices 4. Consistency 5. Confidence 6. Care 7. Control 8. Commitment Proper devotion to the 8 Cs of Customer Retention will go a long way toward preventing the dreaded ninth C – Cancellation .BASIC RETENTION STRETEGY RULE: BASIC RETENTION STRETEGY RULE PUT YOURSELF IN CUSTOMER SHOES IF YOU CANT COME UP WITH A GOOD ANSWER,THE DATABASE WILL FAILMARKETING TO CUSTOMER SEGMENT: MARKETING TO CUSTOMER SEGMENT GOLD Spend Service Dollars Here Spend Marketing Dollars Here Reactivate or Archive Your Best Customers - 80% of Revenue Your Best Hope for New Gold Customers Move Up 1% of Total Revenue These may be losersSTRATEGY FOR EACH SEGMENT: STRATEGY FOR EACH SEGMENT Communications to the segment (direct mail, email, on-location personal attention) Rewards designed to modify behavior Controls to measure the success of the strategy A budget for implementation of the strategy Specific goals and metrics for engagement: for behavior modification An organization that accepts responsibility for the segmentSlide 17: It is not necessary that customer should be more for more profit, less customer can give more profit . Retention of customer must be systematic.WHY BUILD CUSTOMER LOYALITY?: WHY BUILD CUSTOMER LOYALITY? More predictable revenue Command premium prices Lower cost of sales Higher margin Word-of-mouth presentation More open and honest feedback More satisfying workDRIVER OF CUSTOMER LOYALITY: DRIVER OF CUSTOMER LOYALITY 1. Caring treatment 2. Trust 3. Ongoing contact 4. Ownership benefits 5. Convenience to the Customer 6. Consistency of PerformanceHOW TO BUILD LOYALITY: HOW TO BUILD LOYALITY keeping touch with customers using email marketing , thank you cards and more. treating your team well so they treat your customers well. showing that you care and remembering what they like and don’t like. build it by rewarding them for choosing you over your competitors. build it by truly giving a damn about them and figuring out how to make them more success, happy and joyful. DON’Ts: DON’Ts Ignoring customer Wasting time of customer Inequality Using fowl language Providing misleading information Making preconceive notions “QUOTE”: “QUOTE” “WHO SO EVER ENTERS YOUR LIFE, WHO SO EVER EXITS YOUR LIFE DEPENDS ON GOD BUT HOW MUCH TIME YOU SPEND WITH HIM IS DEPEND ON US.”Slide 27: THANK YOU You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
CUSTOMER RETENTION AND LOYALITY tanutayal Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 229 Category: Education License: All Rights Reserved Like it (1) Dislike it (0) Added: August 12, 2011 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... By: sreejankumar (9 month(s) ago) Dear Sir, Can you please send this presentation to my email sreejankumar@yahoo.com Regards Sreejan Saving..... Post Reply Close Saving..... Edit Comment Close Premium member Presentation Transcript CUSTOMER RETENTION AND LOYALITY: CUSTOMER RETENTION AND LOYALITY SUBMITTED TO:- MR.SUDHANSHU KHATRI SUBMITTED BY:- TANU TAYAL NEHA ROHILLA CUSTOMER RETENTION: CUSTOMER RETENTION Customer Retention is the activity that a selling organisation undertak in order to reduce customer defections. Successful customer retention starts with the first contact an organisation has with a customer and continues throughout the entire lifetime of a relationship.WHY CUSTOMER RETENTION IS IMPORTANT?: WHY CUSTOMER RETENTION IS IMPORTANT? Good customer retention is vital to any organization because a slight reduction (5%) in the customer defection rate has a disproportionately positive effect on profitability. Companies with high retention also grow faster. However, customers can only be retained if they are loyal and motivated to resist competition . DETERMINANTS : DETERMINANTS There are seven determinants of customer retention: 1. Customer expectations versus the delivered quality of the product or service 2. Value 3. Product uniqueness and suitability 4. Loyalty mechanisms 5. Ease of purchase 6. Customer service 7. Ease of exit (lock-out provisions) : 1. CUSTOMER EXPECTATIONS VERSUS DELIVERED QUALITY Customers do not simply evaluate a product or service on its own merits. They evaluate it relative to their expectations. Raising expectation levels generates trial, but overly high expectations contribute to low retention. A firm must strike the optimal balance between expectations and delivered quality.Slide 6: 2.Value Here, we define value as quality divided by price. A firm can provide greater value either by offering higher quality and matching the competition on price or by offering the same quality at a lower price. From a customer equity perspective, firms should trade off the potential price premium against the risk of customer defection—and the resulting loss of substantial retention equity.Slide 7: 3. PRODUCT UNIQUENESS AND SUITABILITY The more different (or less substitutable) a product is, the greater the retention rate. Just as the use of "acquisition products" is important in obtaining new customer assets, so too companies should ensure that their product portfolios contain "retention" offerings that customers can trade up to as they proceed through their life cycles.Slide 8: 4. LOYALTY MECHANISMS Loyalty mechanisms can generate high retention rates even when competing products or services a Target, a mass discounter, entices customers to use its credit card by donating 1 percent of their purchases to education. Such loyalty mechanisms, which link usage and rewards, can become very powerful generators of retention almost identical.Slide 9: 5. EASE OF PURCHASE Some products and services are very difficult to find or purchase, which hurts retention. For example, a customer will not regularly buy a specialty brand of stocking if it is not widely available, even if the product is highly differentiated. Ease of purchase is not only a consideration for retail companies; manufacturers of specialty industrial components also need to make sure that their products are easily available to buyers.Slide 10: 6. CUSTOMER SERVICE In some recent studies, customer service was the most important determinant of whether or not a customer would defect from a firm. But defining customer service is not as easy for a company to do as it may seem. Customer service opportunities are pervasive in any organization. Some companies have customer service representatives who are responsible for handling all customer problems. Other companies decentralize the process.Slide 11: 7. EASE OF EXIT Exit barriers offer one strategy for increasing retention. Examples of these barriers include programs that reward continued use based on historical usage; product-design characteristics that make it difficult to change suppliers; and product-learning curves that make it costly to switch to competing products. 9Cs of Client Retention: 9Cs of Client Retention Follow these 8 Cs for Client Retention to avoid the 9 C – Cancellation: 1. Communication 2 . Convenience 3. Choices 4. Consistency 5. Confidence 6. Care 7. Control 8. Commitment Proper devotion to the 8 Cs of Customer Retention will go a long way toward preventing the dreaded ninth C – Cancellation .BASIC RETENTION STRETEGY RULE: BASIC RETENTION STRETEGY RULE PUT YOURSELF IN CUSTOMER SHOES IF YOU CANT COME UP WITH A GOOD ANSWER,THE DATABASE WILL FAILMARKETING TO CUSTOMER SEGMENT: MARKETING TO CUSTOMER SEGMENT GOLD Spend Service Dollars Here Spend Marketing Dollars Here Reactivate or Archive Your Best Customers - 80% of Revenue Your Best Hope for New Gold Customers Move Up 1% of Total Revenue These may be losersSTRATEGY FOR EACH SEGMENT: STRATEGY FOR EACH SEGMENT Communications to the segment (direct mail, email, on-location personal attention) Rewards designed to modify behavior Controls to measure the success of the strategy A budget for implementation of the strategy Specific goals and metrics for engagement: for behavior modification An organization that accepts responsibility for the segmentSlide 17: It is not necessary that customer should be more for more profit, less customer can give more profit . Retention of customer must be systematic.WHY BUILD CUSTOMER LOYALITY?: WHY BUILD CUSTOMER LOYALITY? More predictable revenue Command premium prices Lower cost of sales Higher margin Word-of-mouth presentation More open and honest feedback More satisfying workDRIVER OF CUSTOMER LOYALITY: DRIVER OF CUSTOMER LOYALITY 1. Caring treatment 2. Trust 3. Ongoing contact 4. Ownership benefits 5. Convenience to the Customer 6. Consistency of PerformanceHOW TO BUILD LOYALITY: HOW TO BUILD LOYALITY keeping touch with customers using email marketing , thank you cards and more. treating your team well so they treat your customers well. showing that you care and remembering what they like and don’t like. build it by rewarding them for choosing you over your competitors. build it by truly giving a damn about them and figuring out how to make them more success, happy and joyful. DON’Ts: DON’Ts Ignoring customer Wasting time of customer Inequality Using fowl language Providing misleading information Making preconceive notions “QUOTE”: “QUOTE” “WHO SO EVER ENTERS YOUR LIFE, WHO SO EVER EXITS YOUR LIFE DEPENDS ON GOD BUT HOW MUCH TIME YOU SPEND WITH HIM IS DEPEND ON US.”Slide 27: THANK YOU