...Customer Loyalty Customer Loyalty by definition is a feelings or attitudes that incline a customer to return to a company, shop or outlet to purchase again, or else to re-purchase a particular product, service or brand. In general, the customer loyalty starts with a purchase, and ends with repurchase. Customer staying longer with the company tends to decrease maintenance cost, less prone to price fluctuation and good reference to other customers. “It costs five times more to acquire a new customer than to retain an existing one” (Pfeifer, 2005). For company to remain profitable it is essential for the company to retain its current customers; In other words take care of current customer base before go after new ones. In today’s global market place competition, it is more effective business strategy to retain customer rather than continuously trying to acquire new customers (Anderson, 2004). Empirical data study from (Hallowell, 1996), illustrates that there is a direct relationship between customer satisfaction to customer loyalty, and customer loyalty to profitability. An estimate of the effects of increased customer satisfaction on profitability suggests that attainable increases in satisfaction could dramatically improve company profitability. In this age of internet, customers are empowered with different source of information over the various communication mediums (Griffin, 2002). Now, a company must also allow customers to pull the marketing information they want, when...
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...I strongly agree that customer defection is one of the most illuminating measures in business. However corporations do not measure customer defections or make little effort to prevent them. Customer defection contains nearly all the information a company needs to compete and make profits. It is a clear possible sign that customers see a deteriorating stream of value from the company and diminishing flow of cash from customers to the company. By searching for the root causes and acting on them can help business win back the customers and reestablish the relationship on firmer ground. Lessons * Business doesn’t act on customer defections as many companies aren’t really alarmed by customer defections. Customer defection is often hard to define and is extremely hard to uncover the real root cause. Analyzing failures can be hazardous to careers and is an unpleasant study. Companies don’t understand the relationship between customer loyalty with the cash flow and profits. * In general, the longer a customer stays with a company, the more that customer is worth. Long term customers have no start-up cost and are more profitable than new customers Business fail to focus on value creation which increases the defections from the loyal customers. A climbing defection rate is a predictor or a diminishing flow of cash from your customers. Executives focus heavily on customer satisfaction-surveys but these surveys have weakness and are imperfect. Instead they need to find how many satisfied...
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...A CUSTOMER DEFECTION ANALYSIS FOR: LIBERTY TAX SERVICE Prepared By Alexandra Burge Teale Hocker Anna Schoonover Andy Ward Presented to Dr. James Walker for Strategic Marketing February 27, 2013 TABLE OF CONTENTS TABLE OF CONTENTS i EXECUTIVE SUMMARY ii INTRODUCTION 1 Background Information 1 Literature Review 2 METHOD 3 RESULTS 4 RECCOMENDATIONS 5 CONCLUSION 7 ACKNOWLEDGEMENTS 8 WORKS CITED 9 APPENDIX A 10 APPENDIX B 11 EXECUTIVE SUMMARY A customer defection analysis was carried out for Liberty Tax Service, referred to as Liberty Tax, to determine why customers had defected and provide recommendations on how to retain current and future customers. The analysis was based upon a survey performed on 20 of the 280 customers who had Liberty Tax perform their tax services in 2012 but did not return in 2013. The results of the analysis were divided into controllable, and uncontrollable reasons that customers defect. Controllable reasons found included poor customer service (10%), speed of service (30%) and opting for an online or do-it-yourself tax service (35%). An uncontrollable reason was that customers were moving from the area (25%). The analysis showed that if Liberty Tax retained all the customers who defected in the last year for controllable reasons they would increase revenues by $50,400.00. Finally, four recommendations to help improve retention and capture the lost revenues are given. It is recommended that employees receive more...
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...Is it better to change one's attitude than to change one's circumstances? It seems an unequivocal truth that people’s attitude is the one that demonstrates superior importance of the environment around. A trip down history, however, does not really bear out the claim. Epitomes in both modern life and art stand as best testimony to the idea that those who experienced the alternation of environment could finally have the taste of triumph. As one of the most controversial and influential celebrities in China, Luo never fails to surprise the public. He used to be a manual worker, at that time he aimed to earn more profit; he used to be a former English teacher, at that time he looked forward to having blossoms everywhere. His purpose altered when surface in different circumstances. When Luo became the defector of the education institution, he announced that he would start a smartphone company, the public opinion almost leaned to the same side against him, considering he was a former English teacher, who had little to no experience in electronic industry. With a compact crew of about 10 people, Luo started his fledgling company. In 2013, Luo admitted that he underestimated the difficulty of developing a new product and postponed his schedule of releasing his first smartphone. This concession brought him overwhelming jeers. However, Luo refused to yield to the biased judgment imposed on him. Perfectly aware of the limitation of individuals’ power, he hired a team of elite...
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...A study found that brown capuchin monkeys would make prosocial choices (choosing a representational token that would result in equal benefits for both monkeys, over the token that would only reward the chooser) at the same frequency when they interacted with monkeys in their familiar in-group and unfamiliar outgroup (Suchak & B.M. de Waal, 2012). Cooperators were more likely to continue cooperating even if they had the chance to defect and receive a larger reward. Although the difference was not significant, cooperators interacting with an in-group partner who recently defected would continue to cooperate slightly more than cooperators interacting with an out-group defector. The authors of the paper mention that repeated, mimicked behaviors of cooperative choices made by both partners increases likelihood of future prosocial behavior and develops a bond. This behavior in the monkeys can be beneficial in the wild. When it comes to the survival of the community as a whole, it is better for the individual to continue to cooperate rather than take the whole reward for themselves. Primates are very social animals and rely on a close nit community for many reasons like a communal care for young. Therefore, cooperation is common in capuchin monkeys since they are willing to help others obtain resources and are also more likely to share with individuals who help them. It is also observed that the monkeys that share with their partners will promote successful cooperation and will receive...
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...How can these tools and measures be grouped into separate and distinct categories that companies can measure their existing tools and measures against? • The customers CRM Strategy Cycle containing measures dealing with acquisition收購, development, retention保留, and win back. Converting轉換 prospects前景 to customer; the development of closer bonds through measures of satisfaction, trust and loyalty; affecting purchase behavior measured by cross-sell and up-sell effectiveness; customer retention and defection measures; and win-back or regain measures. 包含與收購，發展，保留 處理的措施，並贏回。前景轉換為客戶的發展更緊密的通過措施的滿意度，信任度和忠誠度，影響購買行為的衡量交叉銷售和向上銷售的有效性;顧客保留和背叛措施;贏回或重獲措施。 • Company measures: efficiency, effectiveness, cost reduction and employee behavior. Measure of campaign effectiveness, campaign management, cost reduction, employee satisfaction, and retention保留 are all relevant here. 公司措施：效率，效益，降低成本和員工的行為。衡量活動效果，競選 管理，降低成本，員工的滿意度和保留 所有與此有關。 • Marketing Research and Customer Knowledge. Customer information necessary in today's environment must be gathered though a variety of techniques including longitudinal studies縱向研究, ethnographic studies人種學研究, observation, buying cycle data, interaction 相互作用scores, critical incident scores, acquisition data, customer-branch relationship data, and models predicting customer retention and response rates. 市場研究和客戶知識。必須聚集在今天的環境中所必需的客戶信息，但各種技術，包括縱向研究，人種學研究，觀察，購買週期的數據，相互作用分值，關鍵事件的分數，採集數據，以客戶為分支的關係數據，以及模型預測客戶的保留和響應率。 b CRM effectiveness...
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...withstanding. (to be changed or added) Retaining brand loyal customers is critical for survival in today’s highly competitive market (Evans 1997) Keeping customers is often a better strategy than attracting new customers. (Rosenberg 1983) Customers have become more confident and more demanding. They want products and services that satisfy them and have no time for those products and services which do not. For this reason, they demand quality that is sustained. Customers are now more tougher, more informed and sensitive to poor services in that they often walk away from bad services and never come back. To make it worse a dissatisfied customer will tell 9 out of 10 people. Customers are well informed and widely aware of their greater power which raises their expectations on how companies should care for them. Many marketing managers are concerned with a growing trend toward brand switching. Among reasons given for the decline in brand loyalty is customer dissatisfaction with products and services, the many new products appearing in the markets and consumers increased concern on the price at the expense of brand loyalty (schiffman, 1994). Today’s customers are also becoming more and more knowledgeable, their tastes, preferences and quality expectations continue to change and this exerts pressure on organizations which seek to meet these ever changing customer needs and build their success on a long-term customer relationship ( Ndeti, 2007) 1.1.1 Concept of Brand Loyalty ...
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...insurance offerings and expanding the market needs. It sold a various forms of insurance in the health, life, casualty, property and automotive areas. Customer segments of the firm’s services are divided into two groups of agents and brokers as well as end-customers. Over the last couple of years, the growth of premium income in German industry is somewhat instable. The declining growth rates had affected German insurance industry due to some reinforcing trends: 1) Worse economic climate such as increasing economic downsizing, increasing unemployment and fluctuations in real income. 2) Higher taxes and social welfare levies. 3) Increasing competition resulting from the deregulation of the European market. 4) Extensive satisfaction of the demand for insurance in German. CUP Corporation had enjoyed remarkable growth despite economic downturns. However, the increasing competition and increasing client price sensitivity in the private insurance market has led to the shorter contracts and more cancellation of existing contracts among customers that is varied by the intensity of the products. Particularly, CUP Corporation is facing some problems regarding to the customer loyalty as well as in the corporate area. In customer loyalty problems, there is increased in the “lapse rate” which refers to the customers who are shortening or cancelling the contracts compared to the total amount of contracts which is varied to the range of products. It is reported...
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...Customer Satisfaction towards Retailers ICA, ICA NÄRA and COOP FORUM Author: Phuc Hong Lu Ian Grace.B. Lukoma Subject: Master Thesis in Business Administration 15 ECTS Program: Master of International Management Gotland University Spring semester 2011 Supervisor: Ph.D Bo Lennstrand ABSTRACT In the midst of stiff and fierce competition and increased number of grocery retail outlets providing a variety of products, customers have become accustomed to patronizing multiple outlets. Retailers have recognized this trend and are of the view that customer satisfaction plays a role in the success of business strategies. Therefore it has become important for grocery retail stores to try and manage customer satisfaction. This paper was thus developed to investigate the satisfaction levels of customers in supermarkets. Data was collected from three supermarkets in Visby, Gotland. The study examined the importance of overall dimensions and specific elements of customer satisfaction towards the measurement of satisfaction levels. In addition, comparative analysis was conducted between the three relative grocery stores. Customer satisfaction levels were measured. The highest percentage of customers of the whole sample belonged to medium level of satisfaction. The statistical result concluded that customers of ICA Nära and customers of ICA were higher satisfied than those of Coop Forum. The results showed that customers felt satisfied with Location, Staff courtesy and Reliability of supermarkets...
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...declining growth rate resulted from several issues, economic climate, higher taxes and social welfare levies, increasing competition, extensive satisfaction of the basic demand for insurance in Germany. In 1996, the number of customer canceling contracts compared to the total amount of contracts, called “lapse rate”, reached DM 900M which is 10% of total premium revenue. They are having customer loyalty problem that has to be solved. One of the issue here is the establishment of CCC (Customer Care Center). This CCC enables the company to provide customer with one telephone number that will answer all of customer questions due to their contract. They need to professionally train people who could effectively answer a variety of questions and increase the service dramatically. The final objective would be to reduce the lapse rate. The “lapse rate” problem for CUP was summarized by the image of leaking bucket, new customers would flow into the bucket while at the same time many leaked out through big holes. Instead of focusing on the “lapse rate”, the problem was restated as a customer loyalty problem that cut across product lines and was considered a corporate problem. Analysis and Discussion CUP decided to create a Customer Care Center to stem defection of customers resulting in part from dissatisfaction with the firm’s service. The...
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...perspective- the company has to consider how CCC is doing for shareholders via increase in firm’s sale, income growth, cash flow as well as profit margin, the centre has to improve agent channel. CCC needs to communicate well with all agent channels to make the sale more smoothly. The CCC also needs to update the information to all agents, training them on how to deal with customers and how to give the correct and most updated information to customers- also for time accessibility. When customers receive the correct information from the agents, they decide to make contact with the firm, in this way there can be improvement in the sales and financial status of the firm. It can also decrease defection rate and increase the number of contracts made. As for internal business process perspective- it can be used to...
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...processes or services so that any defects or deficiencies can be uncovered or to make sure that none exist. These can include costs associated with paying inspectors, equipment, labs and audits. Prevention Costs: these costs are associated with preventing defects or deficiencies from occurring. The costs can include planning, training, setting up systems, quality control procedures and attention to detail in design and production in order to reduce possible defections in service or work. Failure Costs: costs that include both internal and external failures which consist of defective parts or faulty services. Internal failures are discovered internally by the company, usually during the production process. Internal failures can consist of bad materials from vendors, faulty machines or equipment, or just poor work by an employee. External failures are discovered after delivery of services or products. External failures can consist of defective products received by customer or poor service provided to the customer. The trade-offs for these costs are well worth it to the company. For appraisal costs, it will be important to inspect the manufacturing equipment at regular intervals. By paying someone to inspect the machinery, it can prevent much larger costs in the event the machines break down and require additional costs for repair or even replacement costs. The trade-off for the initial costs of the inspection will help to ensure that machines work properly and smoothly...
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...HIGHLINE COMMUNITY COLLEGE Managing Customer Service Winter - 2006 Name: __________________________ Date: _____________ 1.|Personalizing service, using the customer's name, soliciting opinions, and giving special treatment all address what common customer need? | A)|To be comfortable | B)|To feel important | C)|To feel understood | D)|To feel appreciated | 2.|According to the text, all of the following are ways to save time while you serve, except: | A)|Allocate enough time to handle customer issues | B)|Observe other service providers to see how to handle tasks | C)|Ask others to take some of your workload | D)|Be prepared with information and materials | 3.|All of the following are potentially viewed as negative nonverbal signals except | A)|Yawning | B)|Brief eye contact (3-5 seconds) | C)|Crossed arms | D)|Leaning away from a speaker | 4.|Three criteria categories for assignment of tasks are: | A)|Category 1, Category 2. and Category 3 | B)|Must do, can do, and might do | C)|Priority A, Priority B, and Priority C | D)|Can do, will do, and should do | 5.|The three categories of factors responsible for service breakdowns are: | A)|Organizational. human, and customer | B)|Customer, technical, employee | C)|Organizational, employee, technical | D)|Organizational, employee, customer | 6.|Which is not a warning sign of violence? | A)|History of violence | B)|Unmarried | C)|Romantic obsession | D)|Depression | 7.|Which...
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...depends on the availability of customers. No customers no business at all. Both internal and external customers if well satisfied with the product offered including quality and the extent to which their needs are met they will always wish to consume that product, from the same supplier .Banks as it is in any other business enterprises focuses much on retention of its customers and making them royal to their Bank The rapid growing Banking industry and other financial institutions in Tanzania has lead to increased competition in wining customers and hence banks are struggling to retain their customers them .there is increasing evidence of the benefits of service management in service organizations. For example the benefits of maintaining long term relation ship with customers through quality performance and customer satisfaction has lead to marketing strategies to focus on defensive strategies that are based on retaining customers.For these reasons they have focused on relationship marketing to improve retention and customer relationship with service organizations. 1.2 STATEMENT OF THE PROBLEM Customer retention the activity that a selling organization undertakes in order to reduce customer defections. various studies has been done to explore the factor tha influence of customer retention . 1.3. Objectives of the study The following will be the objectives of the study: i. To find out the factors that may hinder customer retention in an organization. ...
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...0 Critical Factors to Building Profitable Customer Loyalty … and why you have to do it, even (or especially) if the economy sucks by Sallie Burnett, Customer Insight Group So the economy is bad. You still have choices. You could slash your marketing budget across the board, cutting both profitable and unprofitable programs by an equal amount. Yes, it cuts costs - but it also makes a smaller company. Or you could stop marketing entirely - a survival technique that's the business equivalent of lying down on I-70 waiting for the next semi. Or - smart you! - you could decide to take action and stack the odds in your favor. You could decide to focus your newly limited resources on the area of greatest opportunity: your existing customers, specifically those who have high growth potential. The result is lower marketing costs and increased sales - not too shabby an outcome in any economy. If you choose to go this route, common sense, experience and statistics are on your side. According to the Customer Service Institute, it costs five times as much to attract a new customer as it does to keep an existing one satisfied. A study by Marketing Metrics found the average company has a 60-70% probability of selling again to existing customers, a 20-40% probability of successfully selling to lapsed customers - but only a 5-20% chance of selling to a prospect. Losing a customer? That's where it gets really expensive. According to studies by the Technical Assistance Research...
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