Topic 8: Customer retention and marketing techniques

Question 1

What is ‘churn rate’?

Answer 1

A measure of customer attrition, defined as the # of customers who discontinue a service during a specified time period, divided by the average total number of customers over that same time period.

Question 2

What are the main customer retention strategies?

Answer 2

1) Targeting customers for retention
2) Bonding (e.g. discounts, loyalty schemes)
3) Employee culture (i.e. truly customer-centric)
4) Service delivery (evolving to meet needs)
5) Building trust (i.e. long-term partners)
6) Service recovery (i.e. when things go wrong)

Question 3

What are the benefits of customer retention?

Answer 3

1) Future potential
2) Less cost-sensitive
3) Track record
4) Satisfied customers become advocates

Question 4

Which behaviours can prevent empathy building with customers?

Answer 4

1) Comparing
2) Rehearsing
3) Deleting
4) Prejudging
5) Preoccupation