Customer retention equity

Question 1

Objectives:

Answer 1

• Understanding market-relating capabilities and market relationships
• Designing a relationship (CRM)strategy

Question 2

Chipotle and loyalty

Answer 2

You cannot cultivate loyal behaviour among customers by just giving away freebies. Loyalty is an emotion…a connection that customers feel with the brand or product. They feel proud of being associated with a brand. And nurturing such a bond takes time.

Question 3

Benefits of retention :

Answer 3

Question 4

Lessons from John Lewis:

Answer 4

1. Make staff care about customer service

None of the 70,000 people who work at John Lewis is an employee - they’re all ‘partners’, who jointly own the business. (It’s officially called the John Lewis Partnership.) They get a profit share based on how much profit is generated by the business as a whole, so they all feel really involved and really incentivised.

2. Teach protocol - but empower staff to make decisions themselves

New members of staff at John Lewis are sent on mass customer service training days before their first day. After that, there’s ongoing training for employees to make sure everyone’s giving the same brilliant service. Want the short-cut to all that insight? Mark the words of the chirpy new recruit trainer who sums up John’s six founding principles of customer service thus: “Be honest; give respect; recognise others; show enterprise; work together; achieve more.“

3. Make sure front-line staff feedback on what customers want

Victoria Simpson, development manager for customer service at John Lewis, recommends talking to customer-facing staff regularly and getting them involved in improving the way things are done. “They have insights no one else can form.” Partners ask customers what they want and what they think, and record results. Then, they act on it. “It’s tempting to feel that once the information has been gathered, the job is done,” Simpson says. “But your processes and culture need to be altered as a result.“

Question 5

Zappos customer service:

Answer 5

1. Make customer service a priority for the whole company. It’s not just a department.
2. Empower your customer service reps. Rarely should they have to escalate a customer’s issue to a supervisor.
3. Fire customers who are insatiable or abuse your employees.
4. Don’t measure call times, don’t upsell, and don’t use scripts.
5. Don’t hide your phone number. You want to talk to customers.
6. View the cost of handling customers’ calls as an investment in marketing, not an expense.
7. Celebrate great service by telling exceptional stories to the entire company.

Question 6

Customer retention strategy graph:

Answer 6

Question 7

Devising a relationship strategy:

Answer 7

1. Understand the sources and consequences of customer retention
   
   • “What is loyalty?”
2. Identify the reasons for defection
   
   • “Why do customers switch?”
3. Select the customers to retain
   
   • “Which customers are valuable?”
4. Design programs to enhance the value proposition and create barriers to imitation
   
   • “How can we gain an advantage?”
5. Align the organization to retention as top priority
   
   • “How will we implement the strategy?”
6. Monitor performance and collect feedback for continuous improvement programs
   
   • “How are we doing?”

Question 8

Dimensions of loyalty:

Answer 8

Question 9

Butterflies-True Friends-Strangers-Barnacles:

Answer 9

Question 10

The virtuous circle of loyalty:

Answer 10

Question 11

Key emotional motivators:

“An emotional connection matters more than customer satisfaction”

Answer 11