Customer retention models vary depending on the type of business and its ability to understand the value of customer retention. Two types of customer loyalty are behavioral and attitudinal, and factors influencing retention can be developed with effective models. Marketing and customer service play important roles in customer satisfaction and loyalty. The apostolic model categorizes customers as loyalists, deserters, mercenaries, and hostages. Ongoing management and a focus on rewards and customer value are also important. Regardless of the model, understanding and identifying customers is key to success.
In business, customer retention models have been extensively researched and expanded upon by various professionals. From the apostle model to cause-related marketing strategies, the types of customer retention models businesses employ depend in part on the type of business offering and the company’s ability to understand the relative value of customer retention. All customer retention models are centered around one thing: the customer.
It is widely recognized that there are two types of customer loyalty: behavioral loyalty and attitudinal loyalty. As the two terms imply, these types of customer retention are influenced by behavior and attitude. Behavioral loyalty encompasses habitual purchases while attitudinal loyalty reflects a consumer’s attitude towards a specific brand. The factors that may or may not influence consumer retention can be developed with a company’s understanding of effective customer retention models.
Customer retention models go hand in hand with marketing. Everything from brand recognition to customer service affects customer retention. For example, in a service-related business, customer service plays an important role in customer satisfaction, which is directly related to customer loyalty. In the apostolic model of customer loyalty, four categories of consumers are distinguished: loyalists, deserters, mercenaries and hostages.
Loyalists are those customers who are both satisfied with a product or service and are likely to continue using it. Deserters are defined as dissatisfied customers who are unlikely to continue using a product or service. Mercenaries are satisfied customers, but whose satisfaction does not guarantee future use. Finally, hostages are defined as dissatisfied customers who will continue to use a product or service simply because there is no viable alternative.
While tailoring customer retention models to a specific business is part of the initial work, retention model management is ongoing. Traditionally, there has been a great emphasis on customer satisfaction. The business that uses a model that trains and encourages a customer service workforce to always satisfy its customers is supposedly successful. However, there are many variables in business models and customer loyalty is no exception.
More recently, a focus on rewards and customer value has become an invaluable part of some customer retention models. Examples include reward points earned for purchases, discounts, and personalized coupons. Again, the type and success of any adapted model depends on factors such as management, commercial offering and customer base. For example, a business that engages in unsolicited offers, or offers that are considered necessary but unsolicited, such as funeral services or mold remediation, are not likely to find success offering rewards to customers. They would likely be more successful delivering superior customer satisfaction, which leads to referrals.
Regardless of what type of customer retention model a company adapts, the foundation of a successful model lies in the ability to understand and identify its customers. Marketing strategies and workforce management contribute greatly to customer retention and retention.
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