With the globalisation of the world competition has become challenging. Competitors from emerging markets are entering into the developed markets. Attracting new customers has become a more expensive and exhausting business. Therefore the customer is one of the most valuable assets of a company; money should be spent to retain them. It can be 10 times more expensive for a business to find one new customer than to keep a current one. Increasing the customer retention rate can provide a terrific boost and help accelerate growth. Additionally, not keeping your current customers will make you loose money and time.
The first part of this paper will show the difference between satisfied and loyal customers. The second part describes why it is worthwhile to transform your satisfied customers into loyal customers. In the third part advice on how to improve your relationship with the customer and how to turn them into loyal consumers is offered.
[...] The key rule of loyalty is: serve your employees first so that they, in turn, can serve your customers.[5] Graphic Reasons for not returnig to a company Practice the 80/20 rule. Not all of your customers create the same value for your company. This means that of your customers generate of your profit. Find out which are your key customers and make sure that they get their fair share of special offers and promotions. Be sensitive with complaints. Research has shown that dissatisfied customers will tell eight to sixteen others about their dissatisfaction by word of mouth of the dissatisfied customers never purchase goods or services from the company again. [...]
[...] Loyal customer: The loyal customer has received service beyond that which he/she expected. This makes him/her excited and favorable to the company. The customer is confident that he/she can trust the company to provide for his/her needs. The customer will return despite offers by the competition. He/she is content and therefore also concerned about the business of the company. It is likely that others will be told about the special treatment he/she received. To turn customers into loyal customers the following perspectives need to be considered: The customer is the most important person in any business A customer is not dependent upon the company, but vice versa. [...]
[...] The time gained can be spent on looking for new customers. A loyal customer is less sensitive than a new customer regarding the price and buys more often. Even if prices are higher than those of the competitors, the customer will still buy from the company. Despite this prices still need to be kept at a reasonable level. That being the case, designing and implementing a plan to build customer loyalty should be of top priority for all business owners, both new and established ones. [...]
[...] Graphic Customers are money How to Build Customer Loyalty There are two basic ways to increase customer loyalty: A “Customer Loyalty Program” can be set up or some “Sweeteners” can be provided for the customers. For big companies a “Customer Loyalty Program” is more suitable. Small companies may only afford to give their customers some special treatment. Customer Loyalty Programs In Customer Loyalty Programs schemes can range from high-tech ones, such as smart cards and air miles, to less sophisticated ones, however still effective, programmes such as issuing a voucher for the next purchase. [...]
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