ABSTRACT
This chapter reviews the essentials for establishing a customer loyalty and retention focus. A sharp focus on creating exceptional value, doing what it takes to satisfy customers and building loyalty programs leads to high customer retention rates. Customer retention tactics are short-term in nature, while customer retention strategies create lasting value for customers. Customer-retention efforts should begin as soon as the firm acquires a customer. Marketers generally examine past and current purchase patterns in analyzing customer retention. Philip Kotler, the internationally renowned professor at Northwestern University, states that “the key to customer retention is customer satisfaction.” Loyalty 2.0 builds on those options and stresses target marketing and technology, but has overwhelmed customers with email and direct mail. Differentiated marketing strategies are needed for the various user groups – first-time users, repeat customers, heavy users and former users. The objective is to move customers up the ladder where possible.
