The best approach to customer retention is to monitor customer satisfaction and building customer relationships.
Customer retention by it's very nature is individualized and will vary by the kind of product or service provided, the kinds of customers served, the number of customers served, the longevity and frequency of customer/supplier interactions, and how you intend to grow your business.
Three very different approaches to customer retention produce meaningful and useful findings:
POST PURCHASE EVALUTION
Satisfaction feedback is obtained from the individual customer at the time of product or service delivery (or shortly afterwards). This type of satisfaction survey is typically used as part of a CRM (Customer Relationship Management System) Retention System and focuses on maintaining a long term relationship with the individual customer
PERIODIC SATISFACTION SURVEYS
Satisfaction feedback from groups of customers at periodic intervals to provide an occasional snapshot of customer experiences and expectations. This type of survey monitors the general "health" of the company and products and can be used to provide tracking benchmarks.
CONTINUOUS SATISFACTION TRACKING
Satisfaction feedback is obtained from the individual customer at the time of product or service delivery (or shortly afterward)… and then periodically thereafter. Customer retention scores based on the satisfaction tracking surveys will provide flags and a management tracking tool to assure quality is at high levels over time.
Customer Retention provides an understanding of customers' expectations and satisfaction. Satisfaction surveys typically require multiple questions that address different dimensions of the satisfaction concept. Satisfaction measurement includes measures of overall satisfaction, satisfaction with individual product and service attributes, and satisfaction with the benefits of purchase. Retention measurement is like peeling away layers of an onion-each layer reveals yet another deeper layer, closer to the core. At a minimum, customer retention surveys should address:
- service concerns that seem to cause customers to leave
- an evaluation of the competitiveness of current pricing
- an evaluation of advertising campaigns, features and benefits promised and delivered
- an evaluation of competitor advertising campaign
- implement an "exit interview" to determine why the customer is leaving or has left
- develop a customer retention problem escalation program that has the power to present incentives, counter-offers, or resolve all problems.
Each of these methods will increase retention through customer intercept, development of measures to key in on customer problems, and measures of the degree of success.
An example question from a customer satisfaction survey.