STUDENTS' CORNER - 209

Loyal Customer 

And loyalty is the child of Trust

All the activities, planning, deliberations and what not , all are directly or indirectly focused on keeping the customer satisfied with the product or services of the company so that he will not easily exit the company. One can understand the significance of the efforts put in by the companies to retain the customer. Simply put, a loyal customer is largely a dependable source of revenue for the company. The more loyal customers the company has, the firmer is the ground the company stands on. Despite all these stints of efforts, the companies also are quite aware of the fact that there will be some customer exits and all these efforts are in a way to compensate the loss the exits might fetch to the company.  These are all common experiences for any business organization.  All the same, let us see what the common steps are generally a company is expected to take so as to stop the customer from switching to another company.

It is the fact that the man, the employee who meets the customer in person to effect a sale is very significant in the sense that the reduction in the customer defection is to a large extent depends on him. He must be knowledgeable enough to answer all the queries of the customers and he must be courteous to them and friendly. His interactions with the customer on the spot must be crisp, communicative and meaningful. He should not lose patience if the customer is persistent with questions. He must not be cold and indifferent to the customers even if the customer happens to be rather unreasonable and tiring. All these point to one fact: the employees must be trained and they must be at least for a while monitored efficiently.

Of course, business analysts talk of customer value to the company. That is, which customer spends more on the products of the company; his frequent purchases bring some real profit, benefit to the company. On the other hand, there may be customers who do not make repeat purchases; it means they contribute much less to the revenue of the company. 

While trying to find measures to adopt to retain the customers, inevitably it involves money. If the frequent purchasers are many and casual customers are less, the training can be programmed accordingly. In other words, attention by the company towards retention of the customer must be in proportion to the benefits accrued; then, the money spent in training the employees becomes investment; if there is no proportion between attention and retention, there is possibility money spent does not become investment but money spent. No business could afford to keep spending but at the same time cannot escape from investment also.

This only underscores the point that money can be invested and not spent, as much as possible. Training the employee is a very big subject and let us not step into that here.

 We will see what more the companies are expected to undertake to achieve reduction in defection.  In our next session.