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With the customer life cycle (CLC) approach, organizations look forward to manage each interaction and every touch point with the firm objective of customer retention.
CLC works in four phases: reach, acquisition, conversion and retention
Reach
The novel methods of ‘reach’ creates better connectivity and intensifies the initial interests among customers of different cross-section of society. The social networking media is one of the cheapest and the most influential way to get connected with wider network. Newspaper ads and articles, hoardings, billboards, Web portals, Blogs, placards, magazines, newsletters, SMS, MMS, TV advertisements, product placements in movies and TV serials, retail outlets, posters, banners, danglers and so on are proper media for getting attention through ‘reach’. It is obscure to compute reach because lack of measurement of the customers who have read the message and who have not.
Acquisition
Acquisition is the next logical step after reach. It need not necessarily generate purchase always. Yet it has potential to create a chance of value addition through response. There is more possibility of turning acquired prospects into actual customer through understanding the needs, requirements and expectation leading to appropriate solution.
Conversion
Conversion happens once acquired prospect becomes actual customer. There is a relationship between customer and organization through revenue generation and customer base expansion. Marketers have to exercise wisely the quality of touch points, the psychographic & demographic profile of the customers, lifestyle & personality factors. Customer is persuaded to higher degree of willingness of purchase & win-win situation is created through reciprocal benefits with cost reduction. This leads to accretion of revenue-generation. Also up-selling & cross-selling is promoted along with repeat purchase through irresistible product offerings.
Retention
Retention is the most crucial step in which the relationship is not only initiated, maintained but also enhanced over long time period and mutual value addition. The feedback is generated through customer interaction and after sales service is provided whenever required by the customers. The best possible after sales service is considered to be the hallmark of concern towards customer satisfaction. New expectation & needs of the customers are studied for devising better product and sensing new product required by the chunk of huge customer base. If the products and services are highly differentiated, branded customer may switch and disqualify the earlier brand. They would find new product, convenience through more user-friendly product, choose better sales promotional perspective, and so on. Defection must be avoided at all stages of CLC as it may hamper the market share. Endeavors are needed to be taken to win the defected customers back.
ROI and ROR
Just acquiring more customers can not be the key determinant of the profitability. Instead of that there is the need of actuating existing customers to repurchase different products or services of the company adding more and more revenue. ROI should be increased through ROR. Again it is to be understood that just repurchasing also would not suffice the objective of successful enterprise as word of mouth must be opted willingly by the customer. Thus they must work as advocate of the brand. They should be treated as special through loyalty programs and also reward system. There is the need of giving special discounted prices and additional unexpected value to convert ‘Satisfied customers’ into ‘delighted customers’.
There is the need of transforming the relationship through providing unexpected positive attributes and giving extraordinary innovative functional benefits. It is necessary- yet difficult- to delight customer for long term. In today’s vying environment customers expect high elation and sophistication through product utility with which he actually generate high loyalty. The pathway of excellence leads to ‘customer ecstasy’ which is the best ever-possible means of strengthening customer relationship with the organization. But the ‘customer ecstasy’ is most volatile as today’s customers are ‘brand swingers’ with no fixed pattern of behavior.
Loyalty Management includes three major stages of association that work in loop:
Customer Satisfaction, repurchase and recommendation
Customer Satisfaction includes : Quality of product or service & value addition
Repurchase includes: satisfaction from product, Post purchase support & after sales service
Recommendation includes: continued value realization & mutual benefits
Summary
New customers are added in the Existing customers base. Existing Customers are offered various loyalty programs through the proficient Information technology. Post-purchase behavior is also the primal aspect of determining loyalty. Product/service quality along with value realization ensures repurchase and high retention. Customer Loyalty is enhanced through warranty / guarantee, free coupons, rebates, incentive programs, partnering. The customer loyalty encourages repurchase and spread a word about product or excellent service with personal touch.
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©2019,Dr.Amit Medhekar.All rights reserved.
