Customer Retention:Customer Retention:The Art of Keeping Good CustomersThe Art of Keeping Good Customers

85%

75%

50%45% 45%

40%35%

30%25%

REDUCE ATTRITION TO INCREASE PROFITSREDUCING THE ATTRITION RATE FROM 10% TO 5%CAN INCREASE PROFITS FROM 25% TO 85%

Calculated by Comparing the Net Present Valuesof the Profit Streams for the Average Customer Life at Current Attrition Rates, With the Net Present Values of the Profit Streams for the Average Customer Life at 5% Lower Attrition Rates.

Branch Deposits

ChargeCard

InsuranceBrokerage

IndustrialDistributionIndustrialLaundry

Office Bldg.Management

Software

Auto SvcChain

CreditInsurance

Key MessagesKey Messages

Customer Values Are ChangingCustomer Values Are Changing

Customer Focus is a DisciplineCustomer Focus is a Discipline

Customer Retention is an Art Customer Retention is an Art ––The Art of Keeping Good CustomersThe Art of Keeping Good Customers

If it touches the customer, If it touches the customer, it’s a marketing issueit’s a marketing issue™™

Changing Customer ValuesChanging Customer Values

1.1. Relevant features and Relevant features and functions, with the ability to functions, with the ability to customisecustomise

2.2. Choices and FlexibilityChoices and Flexibility3.3. Relationships based on trust Relationships based on trust

and rewarded with loyaltyand rewarded with loyalty

Changing Customer ValuesChanging Customer Values

4.4. Sufficient knowledge and Sufficient knowledge and informationinformation

5.5. Complete and Complete and fullfullsatisfactionsatisfaction

6.6. Speed and ConvenienceSpeed and Convenience

Changing Customer ValuesChanging Customer Values

7.7. Environmental ImpactEnvironmental Impact

Importance of Customer Importance of Customer RetentionRetention

“If we don’t take care “If we don’t take care of our customers,of our customers,

someone else will.”someone else will.”

Nick UttonNick UttonChief Marketing OfficerChief Marketing Officer

MasterCard InternationalMasterCard International

Customer FocusCustomer FocusIs A DisciplineIs A Discipline

Customer Focus Is A Discipline Customer Focus Is A Discipline

“Create customer intensity “Create customer intensity everywhere.”everywhere.”

Lew PlattLew PlattCEOCEO

HewlettHewlett--PackardPackard

Focussing on Customer Focussing on Customer NeedsNeeds

The Importance of TLCThe Importance of TLC

TTLLCC

TLCTLC

ThinkThinkLikeLike

CustomersCustomers

Think Like Customers Think Like Customers

Customer ExpectationsCustomer Expectations

AddedValue

(Likes)

Negotiable

(Desires)

Non-Negotiable

(Wants)

Core

(Needs)

Customer Evaluations Customer Evaluations –– 4 PE’s4 PE’s

Promise + Performance ExperiencesPromise + Performance Experiences

People ExperiencesPeople Experiences

Process ExperiencesProcess Experiences

Personal ExperiencesPersonal Experiences

Customer Experience MatrixCustomer Experience Matrix

PersonalPersonal

ProcessesProcesses

PeoplePeople

Promise Promise PerformPerform

Added Added ValueValueNegotiableNegotiable

NonNon--NegotiableNegotiableCoreCore

Customer Experience Customer Experience ScoreboardScoreboard

1010101010101010PersonalPersonal

55555555ProcessesProcesses

55555555PeoplePeople

55555555Promise Promise PerformPerform

Added Added ValueValueNegotiableNegotiable

NonNon--NegotiableNegotiableCoreCore

Heighten Customer ExperiencesHeighten Customer Experiences

Flexible policiesFlexible policiesEmpowered customer contact Empowered customer contact staffstaffTLCTLCConsistent quality and service Consistent quality and service deliverydelivery

Customer RetentionCustomer RetentionIs An ArtIs An Art

Defining CustomersDefining Customers

What is a Customer?What is a Customer?When does someone become When does someone become your Customer?your Customer?

Relationship MarketingRelationship Marketing

NOT Customer Relationship NOT Customer Relationship Management!Management!Forget CRM as you know it.Forget CRM as you know it.Think:Think:

Customer Retention Marketing!Customer Retention Marketing!

Perceptions vs. RealityPerceptions vs. Reality

What is the difference between What is the difference between perception and reality?perception and reality?

Perceptions vs. RealityPerceptions vs. RealityWhat is the difference between perception What is the difference between perception and reality?and reality?

Perceptions are Perceptions are BELIEVEDBELIEVEDby the beholder!by the beholder!

PerceptionsPerceptions

Perceptions are REAL.Perceptions are REAL.

Actually…..perceptions are Actually…..perceptions are more more importantimportant than reality.than reality.

Why?Why?

Perception PointsPerception PointsThe crucial moment when customers The crucial moment when customers and prospects:and prospects:

seeseehearhearsmell smell feelfeel

touchtouchtastetaste

experienceexperience

Perception PointsPerception Points

Key point:Key point:

Each and every point of customer Each and every point of customer contact contact –– before, during, and after before, during, and after a sale a sale –– will affect what people say will affect what people say and believe about you.and believe about you.

Points of InteractionPoints of Interaction

Perception Points = Contact PointsPerception Points = Contact Points

Contact Points = Points of InteractionContact Points = Points of Interaction

Perceptions are formed by customers Perceptions are formed by customers through interactions.through interactions.

7 Cs of Customer Retention7 Cs of Customer Retention

Caring AttitudeCaring AttitudeCustomised PracticesCustomised Practices

Competent CCPsCompetent CCPsCall/Visit OnceCall/Visit Once

Convenient AccessConvenient AccessCompressed Cycle TimesCompressed Cycle Times

Committed Follow ThroughCommitted Follow Through

Customer LoyaltyCustomer Loyalty

Customer Satisfaction is an Customer Satisfaction is an attitude.attitude.Customer Loyalty is a Customer Loyalty is a behaviourbehaviour..

Customer RetentionCustomer RetentionIs An ArtIs An Art

SummarySummary

The great businesses of tomorrow The great businesses of tomorrow will grow exactly the way great will grow exactly the way great businesses have always been businesses have always been

built:built:

by doing marvelous things that by doing marvelous things that meet the needs, wants, and meet the needs, wants, and

desires of customers.desires of customers.

CommitmentCommitment

Don’t have a commitment to Don’t have a commitment to customer service……customer service……

have a commitment to customers.have a commitment to customers.

Howard Marketing ServicesHoward Marketing ServicesAdded ValueAdded Value

Monday Morning Marketing MemoMonday Morning Marketing Memoee--mail newslettermail newsletterArticles, references, links to Articles, references, links to marketing and sales sitesmarketing and sales sites

www.howardwww.howard--marketing.commarketing.comsteven@howardsteven@howard--marketing.commarketing.com

Thank YouThank You