International Retailing Branding Strategies
Over the years, the retailers have adopted several unique strategies and ways of dealing with the challenges. We shall briefly discuss the two major strategies adapted by the international retailers in their areas of global operations. Differentiation by Unique Customer Experience Some of the features that highlight the international retailer product is the standardization in […]
Broadcast Advertising – Radio, Television and Internet
Generally speaking, broadcast advertising is radio, television, and Internet advertising. The commercials aired on radio and televisions are an essential part of broadcast advertising. The broadcast media like radio and television reaches a wider audience as opposed to the print media. The radio and television commercials fall under the category of mass marketing as the […]
Importance of Sales Training for Success in Consultative Sales Process
Being a Sales or Marketing man is one thing and becoming a Sales Manager and managing a sales team is a totally different game. At one point or the other in your career, you will move up the hierarchy and become a sales manager. As a Sales and Marketing manager you will make direct sales […]
Role of Planning, Plans and Planners in Mintzbergs Five Configurations
Role of Planning, Planners, and Plans The previous article discussed the five configurations of organizational structure that Mintzberg proposed as part of his theory. This article examines the role of planning, plans, and planners in each of the configuration. To start with planning is an important element of strategy whenever there is excessive standardization and […]
International Retail Fashion and Ethics
One of the positive effects of the rapid globalization is the increasing awareness amongst people and society about ethical and moral as well as environmental issues. While political leaders and global organisations as well as scientists are concerned about global warming and loosing energy crises, we see the birth and rapid growth of green earth […]
It is difficult to exactly define customer retention as it is a variable process.
A basic definition could be ‘customer retention is the process when customers continue to buy products and services within a determine time period’. However this definition is not applicable for most of the high end and low purchase frequency products as each and every product is not purchased by the customer.
For example in the stock brokerage industry, a customer may not buy a particular scrip in the given period of time but is tended to buy the same when the conditions to buy the scrip becomes favorable and when the customer evaluates that now this scrip could be profitable to buy.
In this case the definition of customer retention could be ‘customer retention is the process when customer is intended to buy the product and services at next favorable buy occasion’. These products are called as long purchase cycle products.
In some scenarios customer’s buying intentions cannot be determined with respect to financial aspects. For example, some magazines are available online for free and there are no intended charges to read these magazines.
A reader who is frequently reading every edition of magazine online could be considered as retained customer as through his intentional behavior he shows the magazine company that he likes the magazine content and he tends to maintain a valuable relationship with the company. Hence this magnifies one more aspect in customer retention definition that revenue is not the deciding criteria that indicates that the customer is retained or not.
Customer retention highly depends on attrition and silent attrition rates. Attrition is the process when customers no longer want to use product and services provided by the supplier and breaks the relationship bond by informing the supplier that he will be no more a customer.
Most of the defecting customers don’t even intimate the supplier that they are defecting. This process is called silent attrition where the customer stops purchasing the product and services and divert to other suppliers without even informing them.
During attrition, organization should prepare serious customer retaining strategies to save the customer to defect. It is often seen that if these corrective measures are implemented successfully to save defection then retention level increases to a much higher level as compared to a normal retention process.
Silent attrition causes the real damage to the organizations because they do not even know when the customer defected. They find no time to implement the corrective measures to try retaining that particular customer or even determine if the customer can be retained or not.
Customer retention does not make sure that the customer is loyal.
For example, a brokerage firm has both traditional trading platform and online trading platform. A customer has his trading account in traditional platform but after some time he feels to switch to online trading platform. Now in this situation, the customer is not considered to be loyal to the given services, but the customer is said to be retained by the same organization.
Customer retention is a strategic process to keep or retain the existing customers and not letting them to diverge or defect to other suppliers or organization for business and this is only possible when there is a quality relationship between customer and supplier.
Usually a customer is tended towards sticking to a particular brand or product as far as his/her basic needs are continued to be properly fulfilled. He/She does not opt for taking a risk in going for a new product.
More is the possibility to retain customers the more is the probability of net growth of business.
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