What is Customer Satisfaction ?
February 12, 2025
Introduction Samsung is a global conglomerate that operates in the “White Goods” market or the market for consumer appliances and gadgets. The company that is a South Korean family owned business has global aspirations and as the recent expansion into newer markets has shown, Samsung is not content with operating in some markets in the […]
Customers are the most important part of business. There cannot be any business without them. Only satisfied customers will be interested in buying and they will also refer other customers to buy. By measuring customer satisfaction a supplier can maintain a quality and long term relationship with customers and secure their future business and financial […]
Resources The activities and processes of the organization utilize certain assets. These assets are called resources. These resources can be created within the organization. They form the internal resources. Such generated resources are organization-specific. Otherwise they could be obtained externally from the suppliers available in the resource markets. They form the external resources. The externally […]
Simply put, E Commerce is ‘Using Electronic Platform for Business Transactions’. It is also called a ‘Virtual Market Place’. Every minute millions of people from all over the world are logging into the Internet looking for some information, for product, services, to look for news, download music, for online shopping and so on. Every individual […]
Customer Relationship management is the strongest and the most efficient approach in maintaining and creating relationships with customers. Customer relationship management is not only pure business but also ideate strong personal bonding within people. Development of this type of bonding drives the business to new levels of success. Once this personal and emotional linkage is […]
Following are some important methods and tools for customer retention:
Database could help in tracking and moderating all the interactions that a customer is indulged in with the supplier. However, the interaction with customers or prospect customers do not generate any revenue for the organization but it important to monitor it as it may return a potential profit in the coming future. This database is normally linked with a CRM system which helps the supplier to identify the reasons for customer defect and also to analyze the possible strategies to overcome it.
Take an example of a loyal customer who spends $10,000 per annum with an airline to travel for business reasons. Now this customer is having a bad experience with the airlines due to many delayed or cancelled flights or bad service provided by flight attendants. This customer could be on an urge to defect due to the overall negative experience.
If the airlines does not implement strategies to save this defect or identify if the customer is vulnerable for defect then it may decrease customer retention. For overcoming this problem the airline should implement a sophisticated CRM database system to analyze the data and determine the change in buying trend of all the customers. It will also help the organization to identify the dissatisfaction sources of customers so that business tactics could be implemented to retain them efficiently.
Deciles are nothing but the top grouping of customers which are ranked high according to the purchases they have made in a given period of time. The deciles percentage is normally 10% or 5% or even 1%, sometimes depending upon the organizational strategies.
These deciles alone are responsible for 60 % to 80% of sales and profit. Hence, after determining this range of customers it becomes easy for the organization to determine which customers are profitable and which are not. After this, retaining strategies could be implemented to retain valuable customer.
Recency means customer purchase in recent time, Frequency means what is the frequency of purchase and Monetary value means how much the customer is ready to spend.
These three aspects are determined by creating an RFM matrix and putting all analyzed data and information inside this matrix. This technique is very important to characterize customers according to their buying habits so that according strategies could be implemented to retain them.
According to the above strong statistics, if the customer recency is more than the first statistic, then the customer is more likely to divert. Hence after identifying this possibility of defection it becomes easy to retain the customers.
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