Meaning of Customer Retention
Customer retention is the ability of an organisation to withhold its customers for a long time. It encompasses all those activities which reduce the customer’s defection rates of business. Higher customer retention rates means that companies are able to retain their customers for a long time. It increases the overall profitability of the business by making less effort.
Customer retention rate is calculated as the percentage of customers company is able to keep till the end in relation to the number of customers it had at starting of specific business period.
The main aim of customer retention programs and activities is to ensure that customers may continue to buy the company products and services for the long term. It focuses on improving the loyalty of customers towards the business so that long term relationship can be established.
It pays attention to the needs of existing customers of the business to serve them better. The customer retention process starts with the moment the customer first interacts with business and continues throughout the lifetime of his relationship with the business. It also reduces the promotional expenses as if the company is able to retain a sufficient number of customers then it will not target much on new customers.
Customer Retention PDF
Following are the chapters of Customer Retention
- Nature of Customer Retention
- Scope of Customer Retention
- Advantages of Customer Retention
- Disadvantages of Customer Retention
- Importance of Customer Retention in Business
Nature of Customer Retention
Nature of Customer Retention is a customer centric approach which aims at strengthening business relations with its clients. It ensures that customers are treated fairly by organization via offering them quality services. Business should not only focus on profit maximization by ignoring the interest of its present customers. read full article.
Scope of Customer Retention
Scope of Customer Retention is one of the foremost benefit offered by customer retention as companies do not need to run mass wide marketing campaigns. Serving the present customer base effectively is cheaper for business in comparison to acquiring new customers. read full article.
Advantages of Customer Retention
Cheaper than Acquisition, Loyal customers yield higher profits, More word of mouth referrals, Advantages Of Customer Retention in detail.
Disadvantages of Customer Retention
Large investment in terms of price and time, Require concerted commitment and Business Culture disadvantages Of Customer Retention in detail
Importance of Customer Retention in Business
Reduce Promotional Expenses It is one of the important advantages of customer retention process. Customer retention cuts down the advertisement and marketing cost of companies. If companies are able to retain sufficient customers for the long term then it is required to focus less on targeting new customers. Let’s find out more about it.