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Total Quality Management




                    Notes            To help clients more intelligently, Rockbridge manage their customer retention, and has
                                     developed scales to measure two constructs that together more fully explain loyalty –
                                     satisfaction and mobility. Existing customer satisfaction surveys often contain enough
                                     information to develop both of these measures. The satisfaction and mobility scales have
                                     a great deal of independence, meaning that a person who is “highly satisfied” can be
                                     either “highly mobile” (i.e., willing to switch to a competitor) or “static” (i.e., unlikely to
                                     change brands).
                                     Customers can be classified by where they fall on each of the two characteristics:
                                          “Safe” customers are considered such because they are not only satisfied, but tend
                                          not to change services even when their satisfaction drops.
                                          “High risk” customers are both unhappy and more likely than other customers to
                                          move on; management might consider writing off this segment, since even if they
                                          could be satisfied, they would still be prone to leaving.
                                          Attention needs to be focused on the “unhappy but static” customers. Every company
                                          has customers like these. Whether it is due to laziness or fear of inertia, they are
                                          likely to remain customers despite their lower satisfaction. Companies should still
                                          seek to correct these customers’ problems. Even though their odds of leaving are
                                          less, they may still change brands, and a satisfied relationship will move them into
                                          the “safe zone.”
                                          “Happy but mobile” customers are satisfied, but are in danger of switching brands,
                                          perhaps because they like to shop for new deals or are receptive to marketing
                                          pressure. The strategy for retaining these types of customers is akin to “watching
                                          the chickens in the henhouse.” They need to be monitored more closely for switching
                                          cues. Companies should also structure pricing and programs to make sticking around
                                          economically rewarding.

                                     Customer retention depends on much more than a process of continually improving
                                     satisfaction. It also requires dealing with attrition as an environmental circumstance that
                                     occurs even when the best service is in place.
                                   Source: http://www.rockresearch.com/a-new-paradigm-for-understanding-customer-retention

                                   Self Assessment

                                   Fill in the blanks:
                                   1.  Customer …………………… is the key to any organization’s effectiveness.
                                   2.  …………………… marketing is emerging as the core marketing activity for businesses
                                       operating in fiercely competitive environments.
                                   3.  Customer Retention is the activity that a selling organization undertakes in order to
                                       reduce customer …………………….

                                   4.  …………………… customer retention strategies impose high switching costs on customers,
                                       discouraging defection.

                                   6.3 Trends in Customer Retention

                                   Retaining and developing customers has long been a critical success factor for businesses. In that
                                   sense, Customer Relationship Management is not new, previously falling under the guise of
                                   customer satisfaction. Worldwide, service organizations have been pioneers in developing
                                   cause retention strategies.



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