Retaining Customers Part IV: Parting Comments

This is a guest post by Bill Bleuel, PhD, Professor of Decision Sciences.

This is the last of a series of four blogs devoted to the topic of customer retention. Read Part 1, Part 2 and Part 3.

The key to competing for retention is to quantify and understand the connections between loyalty and profits.

How to use measurements as tools to ensure integrity, accountability and decision-making relative to the development and implementation of your customer retention program is one of the most important considerations to retain customers.

Keep your tracking systems relevant and flexible so they function as assets to building and refining your retention strategy.
Finally, close the customer partnership loop with effective communication activities.

Critical measurements and Calculations

1. Know your customers.
   • Determine the true cost of each type of customer, from loyal to transient.
   • Compile a customer baseline and data base.
   • Employees are customers: Measure their service performance. More
     1 comments See also in Customers, Management, Uncategorized

Retaining Customers Part III: Invest to Prevent Customer Defections

This is a guest post by Bill Bleuel, PhD, Professor of Decision Sciences.

This is the third of a series of four blogs devoted to the topic of customer retention. Read Part 1 and Part 2.

Every customer that you keep represents at least three that you don’t have to attract. Numerous research studies indicate that the cost of acquiring a new customer usually runs from two to four times the annual cost of keeping an existing customer. Obviously, an effective customer retention strategy translates into profits.

It has been estimated that most companies spend about 98 percent of their time reacting to problems and less than 2 percent preventing them. The first, most important, way to prevent customer defections is to identify and define each problem from the customer’s vantage point. This blog suggests several ways to retain customers once you understand the problems and their ramifications.

Superior service and database management provide your best defense against customer defections. Service provides the opportunity to solve customer problems and build partnerships; the database serves as a vehicle to personalize customer communication and enhance your relationships.

Establish a Customer Baseline

In order to develop a successful retention program, you must have accurate and complete information about your customers. In my experience, at least 5 percent of the information in a typical customer database is inaccurate. Errors translate into wasted money, customer aggravation and loss of credibility.

You should know the following basic information about your customer base: More

Retaining Customers Part II: The Flight of the “Service Zombies”

This is a guest post by Bill Bleuel, PhD, Professor of Decision Sciences.

This is the second of a series of four blogs devoted to the topic of customer retention. To read Part 1, click here.

Employees get excited when management demonstrates a serious commitment to listening to customers and staff’s suggestions for serving them. Building customer loyalty is everyone’s responsibility and everyone’s input is critical. Sharing information is as critical as collecting it: Empowered employees delight in delivering superior personalized service.

Author Peter Drucker points out that, “When people are held responsible, they act responsibly.”

How can you hire terrific, responsible employees?

• Articulate clearly your company values.
• Identify the aspects of a customer service attitude you desire.
• Interview and screen to elicit information about alignment of the person’s philosophical attitudes, principles, values and behaviors with your priorities. Look for employees who like to deal with people.
• Train employees about your corporate philosophy, product knowledge and productivity skills. More
  2 comments See also in Customers, Engagement, Management, Uncategorized

What Price Neurotic Managers?

This is a guest post by Kurt Motamedi, PhD, Professor of Strategy and Leadership

Managers are critical resources for national and global economic and social prosperity. They play a significant role in setting direction, executing strategies, and creating success. Their styles, along with their other competencies, impact the productivity and well-being of their employees, peers, superiors, and consequently firms.

Our observations lead us to categorize four managerial styles at work:

• Type I: Champion, produces great business success and aspires and maintains high levels of morale and well-being.
• Type II: Driver, produces business success, but inflict human costs and lower well-being.
• Type III: Lenient, produces questionable results with high, but short-lived morale.
• Type IV: Negligent, neither provides great business results nor satisfied employees
  

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Bring Happiness to Work!

This is a guest post by Charles D. Kerns, PhD, Associate Professor of Applied Behavioral Science

If an organization does not perform and sustain performance it will decline over time and perhaps die. To sustain performance, a sufficient level of happiness needs to be introduced to an organization. Performance and happiness partner to help assure an organization’s long term success.

High performers will drive the achievement of key results in an organization; happiness will help sustain and maximize performance over time. I encourage you to increase the number of people in your organization who are both happy and high performers. There is good reason to pursue this goal: Happiness research, conducted largely outside organizational settings, suggests that happy, high-performing workforces relate to greater employee satisfaction, productivity, and profits!

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