Customer Retention-A necessary evil?


Why do we need to retain our customers and when is the right time to initiate retention? Most of the times retention activity kickstart when an organization starts observing high percentage of customers moving over to competition or faces periods of extremely poor VOC. Do we need to wait for the inevitable to happen? This will eventually happen in any business cycle when organizations miss out on golden opportunities to:

1) Deliver services as per the TAT/promise made to the customers.

2) Provide shorter turnaround time for customer requests and priority revert for resolving complaints.

3) Use VOC for improving services, setting priorities for customers, employees and business overall.

4) Assess  and address gaps in processes, services, products leading to customer dissatisfaction.

5) Analyze reasons for customer dissatisfaction leading to neutral-poor survey results. 

6) Benchmark internally and externally to remain on top of customer experience score movement and how competition is treating its customers for similar products, services.

7) Tune in marketing and organization strategies with customer wants and requirements.

8) Proactively inform customers of any anomaly in business and ensuring timely compensation in case of any network, service and product outage.

9) Celebrate customer loyalty by inviting and felicitating customers at scheduled customer meet forums.

10) Know the customers better by implementing  KYC and personalizing customers interactions to make them feel special.

11) Provide requisite empowerment to customer service and retention teams across the organization.

12) Invest in applications which support real-time customer feedback and generates analysis.

13) Plan combination of  packs/product/service depending on the customer segment, share of wallet and predictive behaviour modelling.

14) Learn from historical retention and churn patterns.

The tactic should be to acquire-strengthen-retain.

While these might happen in intent the real value of these activities can only and only be extracted when it’s implemented in its “TRUE SENSE”. A lot of these activities get lost in the bureaucratic folds of the organization and that what needs to be completely avoided. These are “CAN DO” critical activities, if these are being avoided and the organization aims for bigger one shot kill for retaining customers,chances are that the customers might question the authenticity of such an approach.Some of them might get retained but not for a very long time. Thus, retention is a continuous activity and cannot be and should not be treated as a one time/once in a while activity.

A lot of organizations have recognized this aspect and created verticals for managing retention but if this vertical does not have the autonomy to co-exist and operate among other departments and verticals then there is nothing very significant coming out of this so-called privileged non empowered group especially when a lot of retention activity has to be proactive. Thus, the group would require to act immediately before the retention moves from a proactive to a reactive mode and that nowadays does not take very long..thanks to social media and massive availability of competitively priced products and services !

To avert the above mentioned scenarios it is imperative to receive immediate alerts of dissatisfied customers:

This will prevent market damage, provide service recovery opportunities damage,provide service recovery opportunities,detect process and services which are flawed.

And now for some statistics:

4% of the dissatisfied customers complain, 91% of the customers will not do business with you,80% will tell 10 people and 20% will tell 20+ more and so on and so forth thus leading to poor VOC.

It can cost 5 times more to buy new customers than retain existing ones.Reducing customer complaints can boost profit by 25% to 85%.

Whats important is to understand the reasons for voluntary and involuntary churn on a regular basis.Accurate reasons for customer discontent or moment of truth can aptly be recorded via instant surveys (Email, SMS ,OBD, IVR) or regular transaction monitoring.A deep dive or 5 why analysis is important to understand the actual cause of discontent and deploy the right retention tool.Organizations could also deploy churn management solutions to study and analyze reasons for customer churn basis change in variables such as usage pattern, time spent with the organization, revenue generated by the customer.

Typical churn reasons could be  due to unsatisfactory customer service leading to repeat calls for –

a) Getting the right solution for the query, request or complaint of the customer and on time resolution.

b) Accurate product or service related information.

Some softer issues could be related to rude behaviour,the way the customer is heard and responded to ,in appropriate answers, inadequate system knowledge,actual problem not captured thus leading to inappropriate resolution of customer issue, non assurance of resolving customer issues, conveying the right communication in times of system errors etc.

While these are some of the issues which might lead to customer churn due to inefficient and ineffective customer service but the root causes run deep.In order to rectify these issues its important to engage the staff in:-

1) Trainings across hierarchy on systems, products, services and processes.Everyone should be trained to have the same understanding across the board. 

2) Empowerment to assist the customer better at all the right layers.

Customer service should be practised from top to bottom management, from backend to front end and from acquisition to retention.The complete customer  life cycle should be customer oriented.

Management processes should be build in such a manner to lead to more favorable outcomes, systems should be integrated and simpler interface should be made available to the customer service staff for speed and efficiency.Policies should be established to improve staff responsiveness to customer needs.


About shailychhabra

Shaily Chhabra has an extensive experience and exposure of 19 years into Customer Service and Quality having worked with prominent names in TELECOM and ITES.This blog is a platform for illustrating practical and easily implementable solutions for achieving Customer Satisfaction based on the experience of many years.The information or knowledge shared in the blogs is a selfless attempt of a passionate professional to help improve SERVICE QUALITY in any way the readers can benefit from.Please do share if you see some recognizable differences/improvement in your workplace post implementation of your interpretation/understanding of my blogs....The knowledge of knowing that it worked for you would be of utmost importance and fulfillment to me.

One response to “Customer Retention-A necessary evil?”

  1. Ankush Julka says :

    Agree with you Shaily. Implementation of the same in TRUE SENSE is what lags and our internal processes/policies are the biggest challenge in implementing the same in TRUE SPIRIT

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