PAPERmaking! g FROM THE PUBLISHERS OF PAPER TECHNOLOGY Volume 1, Number 1, 2015
about service this makes it a less important cause for desertion. In addition, the personalisation and emotional involvement of the customer frequently replaces the service weaknesses. Substantial improvement in customer service in most cases requires significant investments in infrastructure, such as speedy IT systems, alternative channels for more convenience, bigger branches, which the companies often do not have the resources to build in the short term. Desertion caused by institution image Brand strategy is a factor that receives minimal attention in the industry given that a strong or renowned brand is not a key element for offering credit. It becomes relevant once the institution tries to enter into other markets such as the savings or insurance market or Many institutions take for granted their customers need to grow or to be successful. However, given the customer’s nature and business characteristics, this is not always true. Micro entrepreneurs have a variety of financial needs such as insurance or savings, or others such as training, networking, business advisory services and related micro business services. It is frequently overlooked that, for the customer is a means and not an end in and of itself. Customers do not seek product as such: rather they are looking for solutions to their needs. For example, an appliance store that helps the client finance the purchase through interest-bearing instalment payments is selling solutions. Customers have diverse attitudes towards credit, different personal and family goals, different entrepreneurial capacity, etc., so understanding the segments being served is important in order to know who the customer of the current value proposition would match better, so that there will be fewer desertio ns. Considering that goals drive peoples’ behaviour, fully understanding them as well as existing segments and their decision making process, is a basic element for developing an effective retention strategy. Which customer to retain Most business organisations wish to retain all their customers, without discrimination. when faced with retention problems in some market segments. Desertion due to the characteristics of micro-entrepreneurs
However, considering that they must efficiently use their resources, focus is required to retain better customers who are at risk of leaving. In choosing who to focus its efforts upon, the organisation faces the dilemma of identifying who the most “valuable customers” are - the most profitable customers or the needy customer. The risk/value matrix shown illustrates a segmentation combining these variables (Figure 3). As per the above matrix, out of approximately 14865 customers, 47% are having low value/risk, 28% having medium value/risk. 24% having high value/risk, which developed with the purpose of focusing retention efforts on valuable customers who are at risk of leaving.
Probability of leaving: The probability of leaving was established using the Arbitrary Variables Method, which is a mixture of qualitative and quantitative analysis combining numerical desertion data with appropriate weighting. The main quantitative information
Page 5 of 8
Article 5 – Marketing (customers)
Made with FlippingBook - professional solution for displaying marketing and sales documents online