Customer Retention Strategies: Analysis of Key Strategies and Examples

This report provides an overview of customer retention strategies, defining the concept and its significance in minimizing customer defections and fostering brand loyalty. It emphasizes the importance of customer retention in driving business growth and profitability, highlighting the need for organizations to meet customer demands and provide quality service. The report reviews relevant literature, discussing the evolution of marketing strategies from attracting new customers to retaining existing ones in a competitive global market. It outlines various customer retention strategies, such as fulfilling customer demands, delivering excellent customer service, and leveraging mobile banking and data analytics. A case study of Bank Australia illustrates the practical application of these strategies, demonstrating how the bank utilizes mobile banking, financial brands, call centers, and customer feedback to enhance customer loyalty and achieve sustained growth. The report concludes by underscoring the value of customer retention in building strong customer relationships, maximizing sales, and ensuring long-term business success.

Customer retention
Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................1
Brief Literature ................................................................................................................................1
Strategies .........................................................................................................................................1
REFERENCES ...............................................................................................................................3

INTRODUCTION
Customer retention is defined as the action or activity which occurs within organisation
for minimising customer defections. The main objective of customer retention program is to help
organisations to retain their customers. This is done by providing loyal products and services to
people and increasing brand as well as customer loyalty. The CR strategies helps in developing
a personal touch to existing relationship with customers. When all needs and demands of
customers are fulfilled then it leads to providing quality customer service. If a company has good
customer retention strategy, it helps in identification of new customers and retaining them by
providing quality products and services (Hill, and Alexander, 2017). If new customers are
increased then it indicates future growth and development of that organisation. It is very essential
for different organisations to have good customer relation in order to increase sales and profit of
the company. There are many customer retention strategies which an organisation can adopt. The
strategies of CR enables in providing and extracting more value from the existing customer base.
Brief Literature
According to the viewpoint of Armstrong, and Et. Al, (2014), Organisations must
develop right marketing strategies for doing a successful business. In earlier times, companies
focused on marketing strategies for attracting more number of potential customers and increasing
market share. But with the increase in globalisation, many industries have become competitive
that leads to change in running of business. Industries are facing high competition and in order to
retain potential customers, organisations have to meet demands and needs of customers. CR
occurs when a customer is being loyal towards a particular product, service, organisation or
brand. This reflects long term commitment. An organisation can build retention and loyalty by
using various techniques like preferential discounts, database marketing, issue of loyalty cards,
special promotions, free gifts, etc. Customer retention is an important part of marketing and it is
the only system for client segmentation and data mining. A good bond or relationship with
customer is very important for maximising sales and profits.
Strategies
There are some strategies developed within organisations which help in retaining
customers. Such strategies are important for firms as it helps companies to sustain in market for
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longer period and sell their products and services (Han, and Hyun, 2015). Some of the strategies
applied in organisations are explained below with an example of case study -
Fulfilment of customer demands – This is an important part of building good
relationship with customers. When products and services offered by the company is satisfactory
then gradually enhancement of customer loyalty will take place.
Customer service – This consists of various activities that help in building trust and
goodwill among customers. Companies must provide quality services and products for attaining
demands and needs of customers.
Case study – The case study is of Bank Australia which is formerly the members and Education
Credit Union. This is an Australian mutual bank based in Kew, Victoria. This bank is offering
services since 1957. This bank is having a number of loyal customers and it wants to sustain and
retain these customers. In order to this, it is applying different strategies listed below - Mobile banking – This is the most common strategy that can be used by companies to
attract customers. This is an easy way for customers to connect with the services of bank
anytime. Financial brands – This is a digital publication which emphasises on marketing and
strategy issues that affects retail banking and credit unions. This is a customer retention
research and it helps customers to know more about offers provided by bank. Call Centre Evolution – This strategy is used by this bank for reaching customers of
bank at any time. In this way, Bank Australia is able to solve different customer issues
related to damages done by credit crisis. This bank is able to build good relation with it's
customers by providing them service 24*7. Transformation of customer feedback into customer loyalty – It includes taking
feedbacks from customers about services and products offered. This is analysed and
evaluated for improving the services and increasing customer loyalty. Engaging in data analytics – This bank has increased it's customers by grabbing
knowledge about data analytics. This helped in measuring consumer behaviour and
knowing what are various strategies to be implies for increasing customer retention.
 Technological development – The Bank Australia adopted latest techniques and
processes in order to provide quality services to their customers. This helped bank in
increasing sales and number of loyal customers.
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REFERENCES
Books and Journals
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson
Australia.
Han, H. and Hyun, S.S., 2015. Customer retention in the medical tourism industry: Impact of
quality, satisfaction, trust, and price reasonableness. Tourism Management, 46, pp.20-
29.
Hill, N. and Alexander, J., 2017. The handbook of customer satisfaction and loyalty
measurement. Routledge.
Ibojo, B.O., 2015. Impact of Customer Satisfaction on Customer Retention: A Case Study of a
Reputable Bank in Oyo, Oyo State. Nigeria. International Journal of Managerial
Studies and Research (IJMSR), 3(2), pp.42-53.
Izogo, E.E., 2017. Customer loyalty in telecom service sector: the role of service quality and
customer commitment. The TQM Journal, 29(1), pp.19-36.
Yen, Y.S., 2015. Managing perceived risk for customer retention in e-commerce: The role of
switching costs. Information & Computer Security, 23(2), pp.145-160.
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Appendix
Bank Australia sales reflects that it has having good customer retention strategy. This company
is experiencing growth since years.
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The ALDI's development is shown in the above presentation.
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McDonald has adopted various technologies for providing quality services and products to
customers.
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