Customer Retention:
The
point to be remembered always is that a repeat
customer is the best customer. 6:1 is the ratio which
means you need to spend 6 times the money you
spend in retaining an existing customer. Another view
point is 5% increase in retention of customer can add
25% to 125% increase in profit. Essentially, retention
is the key. However, not all your customers are worth
retaining. You should select the customer for
retention. These customers should be the right ones
with whom you wish to establish a long term benefit
for mutual benefit.
There
are a number of benefits for selection of the right
customer for an organization:
-
It reduces cost.
-
It increases
profitability.
-
It helps create goodwill
for your organization.
-
It gets you good word-of
mouth publicity.
-
It improves the
possibility of greater customer satisfaction and
loyalty.
Thus,
its needless to say select the right customer,
have the right understanding of their needs and evolve
a right way to satisfy them.
The Service Marketing Triangle:
The
Service Marketing Triangle shows the relationship and
linkage between three elements of service marketing
Company, Customers and Employees. Three types of
marketing happen between these 3 elements.
-
Company
to customers: External Marketing
-
Company
to employees: Internal Marketing
-
Employees
to customers: Interactive Marketing
External Marketing:
It is a promise a company makes to a customer about
the service and its delivery. External marketing uses
all the elements of communicating and reaching the
customers through advertising, sales promotion,
selling, merchandising and all.
Internal Marketing:
It is all about applying marketing concepts to your
own employees. You should be able to first convince or
market your concept to your own employees and enable
them to deliver the service of the customers. For this
it is important to identify and fulfill your internal
customers i.e. employee needs. Internal marketing is
thus a key to meeting the promises made through
interactive marketing.