| Topic : Understanding customer retention. |
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Activity:
171 views;
last activity : 07 06 2010 20:18:09 +0000
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Satisfied vs retained customers costs
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Both are required
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Good after sale service
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80: 20 rule
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depends upon the type of product
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People always need a change, no matter satisfied or not
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In my view, the cost of retaining a customer should be measured against costs to build a customer trust over years. An unhappy customer or a losing customer can cost to keep other customers away. While introducing a new product to a new customer vs an existing customer, even if it is a branded product, it would be a costly customer for the business. One happy customer is worth five new customers!! |
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I accept with Meena Deshmuk.... well said
i support to meena well said
I support Meena and Nitin....well said
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I think it is not "Either" "or" both "Retention" and "Acquisition" should be given equal priority and should have a seperate strategey.
It is important for us to remember that a "satisfied customer is a repeat customer" and repeat customer is your "best brand ambassador" and will do lip service. Very simple follow ups, comitted response for service calls and periodical interaction will make your existing customer satisfied in above 95 % cases. We also should not forget that majority of us do not like a "change", especially in vendor / service providers cases. So unless, we push our customers out no one is looking at options, as a normal routine. Of course, this does not include shift in cases of bad product / service quality or not meeting the needs of customers.
Lastly - A Bird in Hand is better than two in bush - So it is better to retain the customer than going all out to find a new one - there are humpty number of statistics to prove that acquiring a new customer is costlier than retaining.
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I agree with Balaji here. Retaining old customers is required for sustaining the business;and acquiring new customers isssential to grow it vertically. You cant choose between the two or it will either lead to stagnation or ultimate demise. Take in point Yahoo!. Though they have a large existing customer base, they havent been able to attract as many new customers as they would'e liked and hence have been slotted to the second spot.
Though retaining an existing customer is easier, all resources shouldnt be targeted to him only because no matter what, in today's world brand switching has gone as high as 90%. So unless you have a monoploy in what u provide, you have to keep your eyes on the old and the New!
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A very famous and effective saying," where there is a will, there is a way." If you have a zeal to earn something, you'll definitely get it. Its not tough to retain a customer, the only thing which we have to keep in mind is fair commitment,generosity, proper service and specially good after sales service. If we spend a little time on it, believe me customer is yours for your whole life. |
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yes shalabh m agreed with u ..major point is proper selling. if proper selling done then customer retained and provide more customers as well
Customer retention cost increases primarily once the brand fails to assure the projected quality & service and secondly on huge price difference with competition / loose on FAB.
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If 20% of your customers are responsible for 80% of ur revenue...then...identifying that 20% is a tough job.... due to which its difficult to retain customers...... |
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Normally in consumer products, if the product is good/branded, customers are retained unless the price difference is not much. Same is with medicines, cloths etc. and all other daily use items. It is difficult to retain customers/clients in stock trading/commodity trading/financial products except insurance. In stock market/commodity market whether client has earned or lost, he/she will not last more then six to eight months. Very rare in these markets if clients are attached beyond one year.
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Even a customer is satisfied with a brand, only his series of changing many brands brought him to a satisfied brand. So he eventually looks for more satisfaction and yet jumps to a new brand. |
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Nice observation and great insight sir. |