Importance of Customer Retention to VINAMILK
Customer retention is one of the most important aspects of VINAMILK's business development.
Getting a new client costs five times as much as keeping an existing one, and it can cost up to 30
times more. Increasing customer retention rates by 5% leads to a 25 percent to 95 percent
increase in profits. (Rivera, et al., 2017). Losing customers is costly and damaging to the brand,
not only in terms of sales and profits. Instead of attempting to reclaim clients from competitors,
VINAMILK will focus on various retention techniques in order to increase customer loyalty,
expand its customer base, and increase profitability.
Five retention strategy to be adopted by the brand:
1. Reduction of Attrition
Almost every business loses some customers over time. However, in order for the
business to succeed, it is critical to keep track of how many and how quickly customers
become inactive. It is critical to understand why customers are leaving, and taking
corrective actions will benefit the business.
2. Frequent Communications
Customers are more likely to be loyal to companies that communicate with them during
the presale, sale, and post-sale stages. Maintaining a communication calendar and
informing customers about specials, values, and new attractions will make them feel
valued (Rivera, 2017)
3. Product or Service Integrity
Those who do not take ethical shortcuts will achieve long-term success and customer
retention. What is said and implemented must always be completely consistent with what
customers experience. The product or service's design, build quality, reliability, and
serviceability must meet the standards that customers want, need, and expect
(Clay, 2018).
4. A complaint is a positive growth
Typically, 90 percent of dissatisfied customers do not complain to the company and
instead seek another option, but they do inform their social circle about the product flaw,
so in the event of a complaint, the business should thank the customer for highlighting the
flaw and giving them the opportunity to rectify it.
5. Astonishing Customer Service
Customers usually do not express their dissatisfaction with a company or commend
whether their customer service is good or bad; instead, they show their appreciation
through purchases. Keeping the business with an organization on top of all customer
service strategies is what mostly retains the business as well as keeping the company's
good word of mouth (Clay, 2018).
DETERMINE IMPORTANT STRATEGIC BENEFITS OF BRAND LOYALTY THAT SEEM MOST
APPROPRIATE TO YOUR SMALL FIRM.
STRATEGIC BENEFITS OF BRAND LOYALTY TO VINAMILK
Brand loyalty has a variety of advantages, including providing predictability and security of
demand for the firm, creating barriers to market entry for future competitors, demonstrating
customer willingness to pay a higher price—often 20% to 25% more than competing brands, and
reading the capacity to expand market shares (Kolter & Keller, 2012, p.242.).
The following key benefits are added to VINAMILK.
Financial Benefits: VINAMILK can cut marketing and customer defection costs by converting
clients who have defected to competitors. It may generate considerably more money from sales
to loyal customers who repurchase its items, and it can spend less money on traditional
advertising and more on less expensive social media channels.
Market Expansion: VINAMILK will be able to expand its domestic market share and reach
worldwide markets as a result of its brand reputation.
More opportunities with dissimilar business partners: VINAMILK's positive reputation will
spread through word-of-mouth (the most successful and least expensive form of advertising) and
social media channels, attracting additional potential business partners.
DETERMINE THE KEY FACTORS THAT INFLUENCE CUSTOMER LOYALTY AFTER THEIR INITIAL
PURCHASE
KEY FACTORS INFLUENCING CUSTOMER LOYALTY
1. Convenience: The product must be easily accessible. If the product is not available, most
customers will try another product.
2. Rewards/Freebies: Customers appreciate perks such as discounts, savings, and
recognition of customer loyalty.
3. Community Outreach: When a company reaches out to the community to support
causes and give back, customers are more likely to remain loyal to that company in order
to support its causes.
4. Customer service: Excellent customer service is as important as product quality.
5. Expectations: The product must be dependable and consistent.
6. Personal Relationships: The product should be capable of establishing personal
relationships at all levels. This also applies to any other products or services.
7. Reputation: Customers puts into consideration the product's social influence, as well as
the company's overall ethical reputation, before making a purchase.
Reference:
Clay, R. (2018, May). retention-strategies. Retrieved from:
[Link]
Rivera, R. (2017, June 20). 5-reasons-customer-retention-business. Retrieved from:
[Link]
Kotler, P., & Keller, K. (2012). Marketing Management (14th ed.). Upper Saddle River, New
Jersey: Pearson Education. Retrieved from:
[Link]
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