Explain the importance of retaining customers.

In this information age, almost all the organisations believe that customer is always right. The ones who don’t value customers cease to exist in the long run.

Today’s customer is spoiled by the number of options available in the market from different organisations. The customers are smarter because of the information available to compare different products. It is difficult to please a customer. They have many substitute products available at competitive prices and quality. Customers have access to reviews of products on internet from the different users of the products. As a result today’s customer has become more demanding.

Studies have proved that a business fails if it doesn’t maintain good relations with their existing customers. As the customers are demanding, the organisation cannot give a good product to them. It has constantly strive to give an excellent product.The firm cannot survive by making a sale to a customer. It has to forge a relationship with the customer to ensure that there are repeated sales from him/ her. The long-lasting relationship is beneficial for both the organisation as well as the customer. The organisations work doesn’t ends ate just manufacturing a good product, it has to invest is processes to ensure the products easy availability, delivery, after sales service, replacements, etc.

Maintaining good relations with the existing customers is important for continued success of a business. One satisfied customer will bring more customers to the business and one unhappy customer will take away many customers along with him.

Even after making a sale an organisation cannot relax. It has create repeat customers to ensure more business. The existing customer will switch to a competitor product if the value delivered by the competitor is better.

Customer value is the difference between-
i) the value that a customer gains from owning and using the product, and
ii) the costs of obtaining the product.

The marketers should work on making minimal difference in the customer’s expectations and products performance. If an organisation forges a good relationship with its consumers they propel the business by getting more new customers and share valuable feedback which helps making improvements to the product as well as services like delivery, promotions, access to organisations employees like call centres, service centres, etc. that are associated with the product’s sale.

The long-lasting relationship is beneficial for both the organisation as well as the customer. One satisfied customer will bring more customers to the business and one unhappy customer will take away many customers along with him.

The cost of losing one existing customer is equivalent to gaining 5 new customers. Eddie Yoon in his book “Super Consumers” states that the most loyal customers account for 30%-70% of the sales for an organisations.

Once an organisation values and keep good relations with its customers, they are greatly benefited because loyal consumers bring more not only by buying the company’s products but also by getting more new customers. They also share valuable feedback which helps making improvements to the product as well as associated services like delivery, promotions, etc. associated with the product. Such improvements give the organisation competitive advantage and higher market share in the target market.