Customer

Retention
Strategies
SIGNIFICANCE OF CUSTOMER RETENTION
Customer retention can be defined as the capability of a
firms offer for a customer to continue the purchase or
patronage of its product or service over a specified time
period

Customer focused strategies prove to be more
profitable than any other remedial measure

Research findings reveal that 96 percent of dissatisfied
customers dont complain: most of them just stop
buying
Welcome cycle
Upselling
Cross-selling
Renewal
Lapsed customers
Inactive customers
MAJOR CUSTOMER RETENTION STAGES



CHANGING RETENTION RATES
A critical factor in determining retention is the
difference between a customers expectation and
the delivered quality of the product or service

Raising expectation level generates trial, but
excessively high expectation contributes low
retention

Retention rates can be changed by
Increased spending on retention programmes
or
Improving the effectiveness of retention
programmes in question

The firms best customers are less price sensitive
because of their continued patronage greater
preference for the product or they do not search
for alternatives

Retention rates can vary among the different
stages of customer-firm relationship

The goal of customer retention management is
to optimise customer equity

PROFIT IMPACT OF A RETAINED CUSTOMER