Customer Retention Strategy
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 […]
Retail Management – Meaning and its Need
What is Management? Management refers to the process of bringing people together on a common platform and make them work as a single unit to achieve the goals and objectives of an organization. Management is required in all aspects of life and forms an integral part of all businesses. Retail management The various processes which […]
Why Indian Firms Must Strive for Strategic Autonomy in Their Geoeconomic Strategies
Geopolitics, Economics, and Geoeconomics In the evolving global trading and economic system, firms and corporates are impacted as much by the economic policies of nations as they are by the geopolitical and foreign policies. In other words, any global firm wishing to do business in the international sphere has to be cognizant of both the […]
An Overview of Relationship Management and Why it is Important for Corporates
Introduction: Why is Relationship Management Important? If you are working and have a bank account, chances are that you would have heard of the term Relationship Manager who is tasked with the responsibility of attending to your banking needs as well as proactive account management. Further, if you are working for a corporate and are […]
Planograms – Meaning, its Need and Types of Product Placements
How do you think buildings are constructed? With the help of architectural drawings. An architectural drawing creates a rough print of the building on paper which gives an idea about the floor plans, location of rooms, lobby and so on. In retail a planogram replaces architectural drawings. Once a retailer opens a store, he needs […]
For a developing business it is very important to understand who are the best customers, how to find more customers like these and where to find. Customer profiling is the best strategy to accomplish this. It helps to find valuable new customers, enhance the profitability by retaining existing customers and also identify low valued customers so as to minimize the cost to reach them. Customer profiling is a behavioral relationship marketing technique which includes a variety of marketing strategies ranging from simple one’s to most complex one’s.
Customer profiling starts with identification of relevant information regarding all the satisfied existing customers and then try to target new prospects with matching profiles. The profiles of customers can be categorized differently according to some influential variables present in their profile.
For example, let’s examine the following two customer profiles:
The first profile clearly indicates that the customer characteristics are demographic. The demographic profiles always help the suppliers to attract the customers and generate good revenue in the amateur stages of projects; these projects are basically online projects. The first profile will be interesting for someone inside the organization who is in advertisement department or who is involved in deciding the content and matter of websites.
The second profile can be depicted as a behavioral profile. The basic questions arise regarding to this profile should be, will they buy again? Will they visit again? A behavioral profile indicates the prominence of the relationship with customer in near future hence these profiles are crucial for organizations that focus on retaining more customers to increase their business value. Although behavioral profiles are more prominent than demographic but a combination of both provides a powerful and strong database to decide the customer characteristics in efficient way. The following steps depicts an ideal profiling technique:
The above process is involved ideally for simple profiling which can become complex for complex strategies. After profiling is completed the customers are then segmented according to segmentation variables. Every customer has individual preferences, needs and behavior associated with products which are different from other customers. Substantially it becomes impossible for suppliers to manage customers separately on individual characteristics; hence they pool customers into separate segments according to the type and variables they have in common.
Invalid or wrong information passed while profiling process will result in suboptimal decisions and unworthy consequences and could fetch customer dissatisfaction and could even lead to customer defect. Hence all the information and data should be validated and corrected before profiling is done. Customer profiling is the basis of market research techniques and is proved to be the most useful strategy under any circumstances in customer acquisition approach.
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