Customer Retention ....The game for Survival

With the Retail Boom in India the fight for the Customer Retention is taking a shape of a war wherein each and every Retailer wants to have the biggest share for his Customer Database.......But somehow when we are all talking about the Retention game to be the only way to build a Customer Loyalty We somehow miss to understand that when you could not inculcate the feeling of belonging to your Brand in your Customer you would not be able to Retain him.

Loyalty programs have been extensively used in many industries as a tool to build customer loyalty. It was initially introduced by American Airlines in 1981, as its response towards deregulation in the US’ airline industry. Similar programs then have since spread rapidly across the world through retail, car rental, hotel, financial services industries, and among many others.

Retention marketing programs are designed to prevent customer defection while enhancing the overall valuation of the customer base not just in quantity but also quality and the span of the same.

In this era of intense competition, it is very important for any service company to understand that merely acquiring customers is not sufficient because there is a direct link between customer retention over time and profitability & growth. Customer retention to a great extent depends on service quality and customer satisfaction. It also depends on the ability of the organization to encourage customers to complain and then recover when things go wrong. Complaints are natural part of any service activity as mistakes are an unavoidable feature of all human endeavor and thus also of service recovery. Service recovery is the process of putting things right after something goes wrong in the service delivery.

When you Register a Customer Complain you are actually doing just one part of the affair. So when you not acting on the complain you have register than its Worst than denying to register a complain. Because when you have taken a complain from a Customer you have build a aspiration in him that there is someone who is listening and would eventually act but if that's not happening than your face is in double trouble. As you would not only loose your customer but would also generate a tool to deface you further as a word of mouth.

For absolute Customer Retention marketers have two objectives with any kind of customer retention marketing:

1. They try to hold on with the Valuable Customer Wha tso ever as its easier to retain a customer than to invest in a new customer to make him Valuable Customer.

2. then the second is to create a strategy to Convert a less valuable customer into a more valuable Customer.

The operating cost decreases when a customer stays. Services being rich in experience and credence qualities, it takes some time for customers to get accustomed to it and once they are used to the service and are satisfied with the service provider ,they tend to purchase more over a period of time.

As they remain satisfied with a service provider, they spread a positive word of mouth, which is very effective in case of services for attracting new customers. Longer the customer stays with an organization, more the organization knows about him, which enables it to offer customized services which make it difficult for the customer to defect. This may even provide opportunities to the organization to charge price premium by offering individualized services which may be difficult for the competitors to offer.