Managing Relationships and Building Loyalty
Spending Money to Retain Customer
There is a justification for spending money to retain existing customers who are on the verge of switching to other competitors. Evidently, it costs more to attract a new customer than to retain an existing client. Therefore, the first rule of any business is to retain the existing customers before embarking on looking for new ones. In this aspect, the business will avoid the customer acquisition costs. Indeed, to retain the regular clients, the management must use resources in knowing the needs of the patrons. Therefore, after absolute and thorough information about the customer is compiled, the management will understand how to attract the buyers of its products again and discuss their dissatisfaction before they make the decision of switching to other competitors (Hamilton & Hamilton, 2010). In fact, allocating the money for this initiative will encourage customer retention.
Measures to Create Customer Bonds and Long-Term Relationships
Building relationships with the customers is a fundamental strategy that improves customer service and encourages long term relationships with potential consumers. Therefore, it is critical to focus on the specific tactics that will build a strong supplier/buyer relationship that improves the service and the manufacturing of product. In addition, customer service can be improved to an extent of building “sticky” loyalty devoid of customer churn. The first key measure that creates customer bonds and enhances long-term relationship is to stay in regular contact with the existing customers. In this case, every interaction with the purchaser should not be overlooked but should be treated as an opportunity to build and monitor the existing relationship (Beaujean, Davidson, & Madge, 2006).
The regular contact with the consumers will track their sentiments towards the business as well as rectify the issues identified during the communication. The second key measure is to appreciate and deal with customer’s complaints by resolving them in a prudent manner. Especially, complaints and negative feedback give the employees the opportunity to hear the customer’s thoughts about the company’s service. In addition, clients’ remarks also help the managers improve the service and consequently retain the existing customers. Finally, it is imperative to reward the loyal customers in the business to encourage retention rate and increase the profits (Reicheld, 2001). When loyal customers are rewarded, they reciprocate by coming back for more services and become the best promoters for the company.