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    Customer Ret. Challenges

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    This research paper examines the challenges of customer retention for organizations. Customer retention is important for profitability, as it costs less to retain existing customers than acquire new ones. However, determining which customers to retain, developing retention strategies, and fulfilling customer expectations are challenges. The paper studies customer retention strategies used in the communication industry and suggests that customer satisfaction, classification, and relationship management are key to overcoming retention challenges.

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    Customer Ret. Challenges

    Uploaded by

    rahulrupvyas
    65 views9 pages
    This research paper examines the challenges of customer retention for organizations. Customer retention is important for profitability, as it costs less to retain existing customers than acquire new ones. However, determining which customers to retain, developing retention strategies, and fulfilling customer expectations are challenges. The paper studies customer retention strategies used in the communication industry and suggests that customer satisfaction, classification, and relationship management are key to overcoming retention challenges.

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    This research paper examines the challenges of customer retention for organizations. Customer retention is important for profitability, as it costs less to retain existing customers than acquire new ones. However, determining which customers to retain, developing retention strategies, and fulfilling customer expectations are challenges. The paper studies customer retention strategies used in the communication industry and suggests that customer satisfaction, classification, and relationship management are key to overcoming retention challenges.

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    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    65 views9 pages

    Customer Ret. Challenges

    Uploaded by

    rahulrupvyas
    This research paper examines the challenges of customer retention for organizations. Customer retention is important for profitability, as it costs less to retain existing customers than acquire new ones. However, determining which customers to retain, developing retention strategies, and fulfilling customer expectations are challenges. The paper studies customer retention strategies used in the communication industry and suggests that customer satisfaction, classification, and relationship management are key to overcoming retention challenges.

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    of 9

    RESEARCH PAPER

    CUSTOMER RETENTION CHALLENGES

    SUBMITTED BY:-
    Shoaib Khan (MMM-B)
    Tanmoy Ganguli(MMM-A)

    ABSTRACT
    CUSTOMER RETENTION CHALLENGES

    Customer retention basically deals with the concept of customer relationship marketing, as
    there are many uncertainties exists in the market ,so now a days it is more important to retain
    customer than creating a new customers for earning desire profit, as the cost of acquiring new
    customers increases accounts and competition for deposits and income increases. Retention of
    customer is new marketing paradigm; customer satisfaction with a company’s products or
    services is often seen as the key to a company’s success and long term competitiveness. In the
    context of relationship marketing customer satisfaction is the central determinant of customer
    retention. Customer retention profitability is 25%-85%.

    Customer retention process faces some challenges during relation building phase, retention
    strategies or profit planning concepts. The challenges of retaining customers include determining
    who should be retained and how to retain them. Identification of customer expectations and
    fulfilling them, customer satisfaction and maintaining optimum organization structure are some
    challenges in retaining customer. This research paper mainly emphasis on finding out the
    challenges of customer retention by creating customer retention plans and brand loyalty,
    concentrated on how to provide customer satisfaction and value to product and services.

    KEY WORDS:-

    Relationship marketing, customer satisfaction, customer retention, profit planning, brand loyalty.

    OBJECTIVES:-
    1. To identify the challenges in customer retention for an organization
    2. To identify the role of customer retention in profitability and growth of an organization.
    3. To study various customer retention strategies to overcome prevailing customer retention
    challenges.
    4. To evaluate various alternatives related to customer retention procedure to improve the
    customer retention process..
    5. To Case of a communication industry

    RESEARCH METHODOLOGY:-

    A wide literature survey has been conducted in order to find out the challenges prevailing in the
    customer retention process.

    This research paper focused on certain aspects which are essential for customer retention which
    helps in organizational growth and increase in profitability.

    Research paper also describes the role of customer loyalty programs in order to reduce customer
    churn rate. In preparing this research paper a detailed study is being done of various research
    papers, journals, magazines and an attempt is done to suggest some strategies required to
    overcome customer retention challenges.

    INTRODUCTION:-
    It is quite evident that an increase in customer retention would directly contribute to increase in
    organization's profitability. In spite of this critical business impact, customer retention remains as
    one of the biggest challenges in many industries. In certain industries, Loyalty Programs are used
    to control the customer churn and increase customer retention. However, the key to a successful
    Loyalty Program lies in recognizing and the rewarding the “right” customers.

    According to Frederick Reich held of Bain & Company, and author of “ The
    Loyalty Effect”;
    Longer-term customers are more efficient users of the products and services they buy and have
    lower operational costs, long-term satisfied customers provide more referrals, and longer-term
    customers are less price-sensitive than newer customers. The end result is that the overall value
    of a customer increases the longer that customer remains a customer. Existing customers cost
    less to reach, cost less to sell, are less vulnerable to attacks from the competition, and buy more
    over the long term and keeping customers for longer time leads to the profitability of an
    organization.

    Why customer retention is so important?

    Customer retention is vital for growth and profitability of an organization. Good customer


    retention is vital to any organization because a slight reduction (5%) in the customer defection
    rate has a disproportionately positive effect on profitability (depending on the cost of acquisition,
    ranging between 25% and 85 %). Companies with high retention also grow faster. However,
    customers can only be retained if they are loyal and motivated to resist competition .customer
    retention management relies on the combination of the following:

     High satisfaction with product performance and customer service. 


     High intention to continue to do business with an organization. 
     High willingness to recommend organization to others.

    THE CUSTOMER RETENTION CHALLENGE:-


    Major challenges for an organization in customer retention include:

     Determination of customers whom to retain.


     Strategies required how to retain customer.
     What are the customer expectations?
     How to maintain organization structure in order to attain customer satisfaction.

    In an era when technology changes are accelerating, low price competition abounds, sales
    channels are shifting daily, and loyal customers are in short supply, the company that invests in a
    customer retention strategy and makes a commitment to customer loyalty gains an important
    competitive edge. The key is to understand where that commitment and investment can be best
    applied and what tools and programs can make them work.

    STEPS TAKEN INTO CONSIDERATION TO DEAL WITH THE


    CHALLENGES:-

     Building customer database that identifies loyal customer s and their attributes.
     customer segmentation to be done
     Building trust among customers by providing them special offers and schemes
     To launch marketing loyalty programs for customers
     Employees of an organization deliver all promises properly to customers as given by
    marketing and sales department.

    THE ROOT CAUSES OF ATTRITION OF CUSTOMERS:-


     Poor Services of an Organization
     Inconvenience to the customers
     Unawareness among customers regarding products /services

    CUSTOMER RETENTION MODEL

    There seven determinants of customer retention model:-

    1. Customer expectations versus quality delivered of products and services.


    2. Value
    3. Product uniqueness and suitability
    4. Loyalty mechanisms
    5. Ease of purchase
    6. Customer service
    7. Ease of exit

    CASE OF A COMMUNICATION INDUSTRY


    CUSTOMER CHURN IN COMMUNICATION INDUSTRY:-

    The power in communication market is clearly shifted towards customers, According to global
    consulting firm, ACCENTURE; there are several factors which lead to the steady churn rate of
    customers ;

     Equipment envy or attraction of other competitors


     Flexible pricing plans
     Customer services provided by the companies
     Network performance and number portability
     Technological advancements.

    CUSTOMERS CHURN STATISTICS:-

     Customer churn among cable and telecommunication companies is projected to cost


    organizations up to $10 billion annually worldwide
     Companies lose up to10% to 15% of their customers each year.

    CONCLUSION:-
    Study of customer retention challenges highlights the importance of retaining a customer for an
    organization’s growth and profitability and it is much profitable for an organization instead of
    creating a new customer as creating a customer leads to a increase in cost and decline in profits.
    So, formulation of policies related to customer retention is of much importance for the company
    point of view.

    SUGGESTIONS:-
    Customer satisfaction, customer classification and customer profiling are some of the factors
    taken into consideration before implementing plans for customer retention process. Introducing
    customer loyalty marketing plans , designing a products and providing services in accordance
    with the customer expectations are the main parameters which helps the companies to cope up
    with the challenges related to customer retention.

    Companies must take into consideration mainly two components that is customer satisfaction and
    systematic and proactive customer relationship management for the better implementation of
    customer retention strategies.

    REFERENCES:-

    1. Google search
    2. Wikipedia
    3. S. Shajahan ,Relationship marketing
    4. Communication Industry Report.

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