Customer retention research paper

Your customer success managers should create and revise on a regular basis a relationship roadmap.

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Build in steps for initiatives and projects that both parties can look to and be excited about the current and next stage of the relationship. Make memories around your shared successes. Even if there are more positive events overall, the bad occurrences may be the longest lasting memories -- which makes customers more likely to share those negative events on social media, too. So customer success teams need to consider how they can create better, more memorable experiences around positives and successes.

When something negative occurs -- a goal or deadline is missed for example -- the company team overly communicates, discusses plans for fixing the issue, apologizes, etc. But when something truly great happens, how much of an emphasis do you place on the event? You can't improve customer retention without first understanding why customers leave your company. Once you know the reasons and the correlating signs, you can work to prevent customer churn by proactively dealing with issues.

For example: By tracking by project, you can identify customer happiness trends and work to improve processes or ask for more qualitative feedback on what exactly is contributing to the fall in customer satisfaction. Being able to identify and address these issues as early as possible will help you to prevent customers from leaving you in the first place. The voice of the customer is a powerful customer retention tool -- so use it.

Consistency builds trust with customers. They know what to expect and can rely on your team to get the work done and deliver the results they need. Have set agendas for meetings.

Having a process for each of these activities will make your team more efficient, and the customer will have insight into what needs to be done, and when. Have you considered what the communication from your company looks like once a customer signs on? Yes, she emails and works with her customer success manager, but how often does she hear from the new business director who convinced her to buy from you?

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Consider creating a newsletter sent from the company CEO for monthly or quarterly check-ins. Consider if there are education or training needs of the customer you should address. Come up with interesting, light touch ways to continue to build up the credibility of your company's brand with the customer. With detailed notes and a complete history of the relationship recorded, a new customer success manager will be ready to be a true authority for the customer much more quickly.

Research Proposal on Customer Retention Essay

Typically, customers mainly communicate with their primary customer success manager. These individuals form a bond during hundreds of meetings, phone calls, and emails. They know each other's favorite restaurants, what sports their kids' play, and other seemingly inconsequential details. But change puts these relationships at risk -- and, in turn, your company's customer retention rate. If the customer success manager leaves or is promoted, the relationship is at risk.

If the relationship is extremely friendly, the customer might not be happy with anyone else. This is a risky place to be in terms of retention, so your company needs to make it a goal that customers build relationships with multiple members of the team for cases like these.

Send the customer pictures of the entire team working on the latest project, or whenever there is a customer lunch, make sure there is another member of the team present.

Reciprocity is a social construct that has been found to increase loyalty. Acts of kindness create a feeling of obligation in the person who instinctively wants to repay the kindness. Both of these can be used in customer service to increase loyalty. An example of this would be when your company sends over tickets for a game the day of or when a goal is achieved earlier than anticipated.

It doesn't mean you document and put all the great things you do in a monthly report, but it is obvious to the customer that what you are doing is outside the normal scope of the relationship. In sum, different reasons make customers loyal with a brand. All these reasons or utilities then explain why the customer would be loyal.

The basic model proposed here explains how customer satisfaction is associated with loyalty through these various reasons. In this sense, we exclude the habitual buying behavior as a means to reduce perceived risk and effort. Indeed customer loyalty occurs when the customers exhibit repeat purchase behavior which is the result of a strong positive attitude toward the brand, which in turn makes them more resistant to brand switching Dick and Basu, Habitual consumers however simply buy repeatedly, even if they do not necessarily have a strong positive attitude toward the brand as part of their risk and effort reduction strategy.

This being, we propose that the relation o customer satisfaction and loyalty should exhibit three features see Figure 2. First, loyalty should increase more after a certain level of satisfaction has been reached a minimum threshold. Indeed, any consumption experience is not supposed to lead to customer loyalty. It is the expected utility of such a behavior that will be determinant.

This expected utility will be a function of customer satisfaction. This value is primarily determined by prior customer satisfaction and eventually the new information obtained by the customer. However, we limit our conceptualization to customer satisfaction only. Note that this minimum level may differ across individuals on the basis of their accumulated experiences.

As a result, brand attitude should be enhanced and the customer should start to reduce the number of brands considered on a purchase occasion, with the satisfactory brand being recalled first. Second, within points f 1 the minimum and f 2 the maximum , loyalty should increase considerably as the utility of engaging in a relationship with the brand keeps increasing. Indeed, there should be a phase where satisfaction and loyalty should be increasing more due to the increase in the derived utility e.

The impact of satisfaction on loyalty therefore should be greater within this phase and this should result in an enhanced brand attitude, and in a decrease in the size of the consideration set.

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Customer Retention Surveys: Best Practices & How-To | Qualtrics

In this case, each additional unit of customer satisfaction will bring less in incremental loyalty than the previous unit did. Formally, the relation of customer satisfaction and loyalty can be expressed as follows:.

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Equation 1a posits that the loyalty function has two thresholds f 1 and f 2 showing customer loyalty initially increasing more after the first threshold f 1 is reached at an increasing rate i. Indeed, there are limits on time and effort associated to any activity. For instance, a customer who receives poor quality would be more predisposed to switch.

Customer Retention Surveys

As satisfaction increases, the customer perceives the utility to repurchase the same brand again. But, at very high levels of satisfaction, loyalty might levels out. Different reasons might explain such a phenomenon. The first is the saturation effect. Indeed, when the customer is exposed to increasing levels of a same attribute or brand, the marginal utility of that attribute or brand might decrease. What can occur when the customer buys the same brand constantly. The second reason is related to competitive intensity within the industry. For example, increasing competition might move the standards of product evaluation up.

This in turn might decrease customer relative utility with the current brand. In either case, the marginal utility that will be derived from brand switching can become greater than the marginal utility of loyalty.

Spanish Journal of Marketing - ESIC

In order to discuss the decreasing effects of satisfaction on loyalty, we use four samples of customers. Except for sample 4 where the data was collected in a larger city all the respondents were interviewed by marketing students from the local university as part of a marketing research course. All samples were conveniently composed. Convenience samples are appropriate for this research given that we are interested in whether or not our samples have enough variance that can be explained by the theoretical model.

To test models, we require measures of satisfaction and loyalty see Table 1. S atisfaction. Four 7-point Likert items were selected from those suggested in previous works see Bitner and Hubbert, ; Oliver, Loyalty was measured with five 7-point Likert items in terms of repurchase intentions and Word-of-mouth intentions Nayarandas, The idea being that loyalty results in a stronger brand attitude Dick and Basu, This strong and positive attitude is translated into strong repurchase and word-of-mouth intentions.

The cut-off value of 0. All the measures have acceptable reliability. Table 2 summarizes the main characteristics of the data. Empirical Models. In order to test whether customer satisfaction has a linear, a quadratic or a two-threshold relationship with customer loyalty, we specify the following equations:.

Where L i represents loyalty of customer i; SAT i is customer satisfaction of individual i. Two dummy variables are used in Equation 4. Equation 2 is the appropriate specification to capture the linear relationship.

It implies that loyalty keeps increasing as satisfaction increases. The quadratic components were constructed with mean-centered scores. Equation 3 represents the quadratic relationship. It proposes that loyalty increases differently depending on satisfaction values. Equation 4 is the appropriate specification for testing the hypothesized functional form. This dummy-variable equation allows us to define three different groups of customers according to their levels of satisfaction:.

All the differences in the parameters are assessed in reference to Group 2. The constants a oS1 and a oS2 are supposed to capture the differences in the origins of the regression lines across the three groups of customers.