Customer Retention Programmes

How can organizations retain customers? The marketing programme should be derived from and support the company’s mission and business plans. The following step-by-step approach gives a methodology to develop a comprehensive customer retention programme.

1. Step 1: Review the Mission Statement

The first step is to review the company’s mission statement. Mission statements should be based on the needs of the customer and not just product or competition based. For example, rather than saying that the mission is “to offer the best-quality microprocessor to the Information Technology industry,” the company’s mission should be “to ensure the success and profitability of customers in the Information Technology industry through offering the finest quality products and services.” In other words, changing the focus from internal to both internal and external (or customer) quality.

2. Step 2: Research Your Customer Base

Research the customer base to identify the most profitable customers and customer seg­ments. There is much focus today on “one-to-one” marketing. However, many small compa­nies cannot maintain the massive amounts of data required to market to a “segment of one” (individual customer). If the company can divide the customer base into several profitable customer segments, it can refine its marketing message to these “segments of several” rather than to “segments of one.”

3. Step 3: Measure Customer Defection Rates

Measuring customer defection rates is essential to take steps to reduce customer defections. Set a goal for customer retention and communicate that goal to the rest of the company. Making customer retention a focus may also require organizational changes. Companies that operate with separate functional departments have a hard time ensuring quality for each customer’s individual needs. Many companies have had to create customer teams—interde­partmental groups that focus on the success of one customer or a segment of customers.

4. Step 4: Stay in Front of Customers

Develop contacts with the customer at least five to six times in a year. The contacts may be in the form of face-to-face meetings, electronic communications or direct mail pieces inform­ing customers of new or other products.

5. Step 5: Take the Extra Mileage

Take extra steps to learn about businesses run by customers. This is needed in order to help them become more profitable. One company saved its customers 68 million dollars in annual costs by teaching customers how to use less of its product.

6. Step 6: Create a Proprietary Way of Communicating or Servicing Customers

Customers should know whom to contact when they have a problem or question. Informa­tion should be provided on the Internet or in customer service manuals. Constantly survey customers for feedback and ask for detailed responses.

Source: Poornima M. Charantimath (2017), Total Quality Management, Pearson; 3rd edition.

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