Customer Retention Strategy
April 3, 2025
Following are some of the important strategies that should be implemented for increasing customer retention: Changing Retention rates: There are two basic strategies for changing retention rates: Fixed response higher spending: Retention rates can be substantially increased by spending more on creating new business strategies or remolding existing strategies to increase retention rates. Fixed spending…
Human Resources are those constituents of an organization that take care of the human facets and needs of all employees within that organization. Key functions of HR in an organization are- Employee recruitment and selection. Compensation calculation and reward program management. In-house training for all employees according to skill sets. Performance calculation and managing employee…
It is difficult to exactly define customer retention as it is a variable process. A basic definition could be ‘customer retention is the process when customers continue to buy products and services within a determine time period’. However this definition is not applicable for most of the high end and low purchase frequency products as…
Customer modeling is the process of predicting and forecasting behavioral aspects of customers’ future perspectives. The process includes identification of marketing and campaigning targets and optimizing predictive analysis. Following are the broadly discussed aspects of customer modeling:
The approach is to divide the customers into modules or sub groups and then assign probability of response to each sub group. Marketing professional and decision making personals then decide the exact number of customers to be included in that particular promotion or program.
Modeling techniques are used to predict life time value of customers and profit impacting customer behavior like probability of product purchase, frequency of product purchase, spending capabilities, loyalty, usage of support and services.
These predictive models support various kinds of processes like marketing campaigns, forecasting of financial and developmental aspects, customer budget management and asset management.
Organization usually gets highest return on investment from their marketing promotions by modeling the price elasticity of customers so that a valid offer can be given to each customer. By this the profit margin of product increases with low cost to the organization.
Modeling and profiling are mostly same but the basic difference between them is the factor of time involved in modeling processes; as the modeling is not a static process. Modeling is quite more sophisticatedly implemented and thus making it powerful technique to predict customer behavior.
Modeling process is action oriented and is not at all static throughout the customer life cycle.
Profiling on the other hand is static and no action is taken apart from just recording the actual information and doing analysis on that information.
Modeling on other hand involves action to be taken over times. Modeling also increases the return on investment and enhances business perspectives by fetching out good profit. Being more powerful and effective technique, marketing professionals prefer customer modeling in place of customer profiling because they have to deal with actual customer data.
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