Organizations that were focused squarely on customer acquisition have now reversed their course to ensure that they are retaining customers. Retention requires a better understanding of customers through the data describing them - this in particular is very challenging. The challenge is in determining why customers leave or in some cases, when it's OK for them to leave a brand. The answer varies from organization to organization.
Organizations need loyalty from customers, particularly those who are valuable. Customer lifetime value, customer margin, net incremental revenue, products per customer and high margin products per customer are all the kinds of refined metrics that are thought through.
First, organizations should begin their evaluations of customer data and customer loyalty with a data audit. Identify different segments of customers and their loyalty attributes with data profiling initiatives. Second, defining and understanding the data is just one step. Ideally, this also needs to be shared within the organization. Finally, back-and-forth collaboration with things like social media, where you can have that two-way communication for understanding what a customer wants and needs and how to anticipate them over time.
While database marketing activities such as cross-selling, up-selling, frequency rewards and customer tier programs focus on developing the customer, there is always the fear that in the midst of these efforts, the customer will decide to leave the company, i.e. "churn". The prevention of customer churn through customer retention is a core issue of Customer Relationship Management (CRM). To control customer churn, focus on proactive churn management, where the customer is contacted ahead of when they are predicted to churn and provided a service or incentive designed to prevent the customer from churning.
Remember, enticing customers and personalizing their experience is where loyalty starts. Today's businesses need face-to-face exposure with customers leading to one-to-one interactions and real-time data through Social CRM and RSS Feeds to build rapport and decrease churn.
Our analysts unlock the predictive power of your customer databases and provide highly predictive models for identifying potential cases of attrition. The attrition models thus built identify customers that are most likely to leave you for competition. This information overlaid with customer profitability provides a powerful method to design profitable retention programs.Contact CRM expert
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