About Customer Retention
Customer retention reflects the soul of your company. In order to serve the customer, we must think like the customer and the employee. Customer retention reflects “the state of mind that customers have about a company and its products or services when their expectations have been met or exceeded. This state reflects the lifetime of the product or service experience.”
Effective customer retention strategies must focus on measuring and achieving the following objectives:
- Maximize customer satisfaction for current customers.
- Identify dissatisfied customers before they leave through a customer retention program.
- Measure why current customers leave.
Customer retention requires attention to customer details. Establishing personal relationships is difficult, especially as businesses grow. We are all aware of businesses that have lost their “personal touch” and seemingly no longer know either your name or your needs.
Effective customer retention management can help you build your business without loosing the friendly face on your business. Because business evolves, the customer retention target is continually moving and customer retention surveys can be good for the following:
- Discovering the Defects…
- In-Time Identification of Dissatisfied Customers
- Employee Involvement
- Benchmarking of Satisfaction and Customer Retention—Loss Levels
- Planning of Customer Retention Solutions
- Establishment of Standards for Excellence
- Process Management and Improvement
- Stretch Objectives for Continued Satisfaction and Improvement
Typical reasons for customers leaving include:
- Poor Service
- Lack of Personalized Service
- Cost / Value Breakdown
- Lost Customers (Contact Information Outdated)
- Competitor Superiority
- No Longer in the Market (Doesn’t Need)
The “Best” Approach For Customer Retention and Satisfaction Surveys
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 Evaluation
Satisfaction feedback is obtained from the individual customer at the time of product or service delivery (or shortly afterward). 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.
Customer Feedback: Voice of the Customer
Successful companies understand the importance of the Voice of the Customer (VOC) as an integral part of customer retention management.
“Voice of the Customer” addresses both strategic and operational decisions of the corporation using a hierarchical customer retention and needs analysis. VOC prioritizes customer needs according to what they really need and want.
As key criterion in total quality management, Voice of the Customer, drives the Baldrige Award criteria. As stated by The National Institute of Standards and Technology (NIST), the first key concept in the Baldrige Award criteria is that “quality is based on the customer (NIST 1991, p. 2).”
Voice Of The Customer Retention Surveys
Our Voice of the Customer monitoring system allows data integration to any CRM solution. We have experience working with Siebel, Microsoft, People Soft, etc. Customer surveys can be sent automatically and on a continual basis with no human interaction. Sophisticated customer tracking and smart text piping options may be used to customize and pre-populate the questionnaires based on the individuals CRM or account information.
Our clients are using the VOC system to send automatic surveys to their customers after using a help desk, making an online purchase or registering a new product. VOC surveys are personally addressed to the individual while asking specific question based on the customers recent purchase or request.
Our clients are using these customer retention survey opportunities to help determine market segmentation, product evaluation and awareness along with overall satisfaction and intention to continue as a customer with the company.
In the case of the customer being extremely dissatisfied with a process or purchase, our clients can access or receive via e-mail a copy of all dissatisfactory surveys. Customer feedback is sent immediately via email to a designated individual inside the organization for timely follow up and quality control.
As an example in the consumer products area, one manufacturer observed a long term decline in sales of a leading item in their product line. Management struggled with determining whether the decline was due to quality issues or due to other issues related to product appeal. Using Voice of the Customer technology, important customer needs were identified. More in-depth analysis showed that these needs were associated with key design attributes that could be easily modified to improve product quality. The net result was a reversal in sales decline and rejuvenation of an important part of the product line.
Voice of the Customer technology satisfies information needs while keeping the customer in mind.