What is Customer Retention?

The customer retention is one of the approaches based on consumer behavior. It helps company to retain the customers, not even current customer but also attracts new customers and potential customers in domestic market and around the world. This approach helps customers from action to reaction in order to keep contact with them. Those marketers who recognize the important of customer retention will push as much emphasis to create or strengthen brand loyalty. The improvement of customer satisfaction and customer retention come from variety of activities available to the company. The gain in customer retention comes from improvements of service quality, customer complaint handling and service feature.

Customer Retention

Caring for existing customers used to be second to attracting new customers. Within a company, there is always a need of the salesperson who acquires the new customer as well as a salesperson that take care old customers. Nowadays, most of companies prioritize keeping, caring for and developing existing relationships. Their strategy is treating the old customers well before start courting new customer from the competitor.

Importance of Customer Enhancement

In the era of mature and intense, most of companies in the same sector are offering the same service to the customer, and they tend to be different from the others. Therefore is a pressure upon the company to retain the customer. Past and current customer behavior will help us to predict the future or potential customer behavior. Past behavior of our customer can help us to segment the company’s customer, what they want about our products or services and how to satisfy them. It is often true in activities like making purchases or visiting websites. Those customers who were satisfied will tend to stay longer in relationship with the company. Marketers should take advantage to offer promotions of various kinds like discounts or coupons and sweepstakes. Promotion keeps the interaction of customers with company. Competition is happening day by day, the cost of courting one customer could be lesser than losing one customer. Hence, it is very important to appreciate the customer’s overtime. In addition, many companies tend to develop stronger bonds and loyalty with their customer. In the past, many companies took their customers for granted. Their customers may not have had many alternative sources of supply, or all suppliers provide same services or product with the same quality or switching cost to other supplier was high or even the market was growing so fast that the company did not worry about satisfy its customers.

Attitude and Expectations of Customer

Customer’s needs and wants become more various. Understanding customer’s expectation is more and more important to service-oriented company, there are numerous companies offer same product or services, therefore customer has many choices and they tend to switch if they are not satisfied. Today’s customers are harder to please. They are smarter, more price conscious, more demanding, less forgiving and approached by more competitors with equal or even better offers. The challenge is not producing satisfied customers, because other company even does it better. The challenge is to produce loyal customers. Marketers emphasize focus on customer retention by creating the right physical environment, employ right people, expose the right culture and deliver to customer focused products. Customer should know what they are given when using company’s products or services. Determine the right expectation is important in order to avoid customer dissatisfaction or expectations that cannot be fulfilled. Often, wrong information or unjustified expectation is reason leads to dissatisfaction. The issues can lead to brand switching, complaining or bad word of mouth. Creating the attitude, get to know customer expectation and providing more information towards the company to customer is a good strategy for marketers to retain customer.

Customer Satisfaction

Whether the buyer is satisfied after purchase is up to performance of the company in relation to the customer’s expectation. Customer satisfaction is the feeling or attitude towards products or services of customer after purchased or used and it is generally described as the full meeting of customer’s expectations.

Customer satisfaction can be viewed as an attitude of customer which helps to retain customers. Many companies are aiming for high satisfaction because customers who are just satisfied still find it easy to switch when a better offer comes along. Those who are highly satisfied are much less ready to switch. High satisfaction or delight can helps to create a strong relationship with the brand and then leads to high customer loyalty.

Customer Loyalty

Customer loyalty comes from a number of methods which builds closer links with customers and hence moving them higher up the relationship marketing ladder. A basic approach to building relationships is through the development of enhanced benefits of loyalty for customer. There are financial benefits or social benefits. Financial benefits offer to customer a reason to build a long term relationship and remain loyal with company. Social benefits might be the establishment of regular social groupings or even includes corporate hospitality or social events sponsored by a company where its clients can meet other clients with a view to developing their mutual business interest.

To improve the probability of customer retention it is now necessary to go beyond what is expected and deliver even greater value to customers. Among very satisfied or delighted customers retention rates are significantly higher, and they are more likely to become advocates, telling stories of their goods experiences towards company. Creating loyal customer demands a high priority be given to customer service, both in the strategies and the actions it takes in the marketplace.

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