Please make an explanation of these

Reducing Defection

It is not enough to attract new customers, the company must also keep them and increase their business. Most of the companies suffer from high customer churn or defection.

To reduce the defection rate, The company must:

1. Define and measure its retention rate
2. Distinguish the causes of customers attrition and identify those that can be managed better.
3. Compare the lost customer's lifetime value to the costs of reducing the defection rate.

Retention dynamics - this is the main steps in attracting and retaining customers in terms of a funnel and some sample questions to measure customer progress the funnel.

The marketing Funnel - identifies percentage of the potential target market at each stage in the decision process, from merely aware to highly loyal.

• It is also emphasized how important it is not just to attract new customers but to retain and cultivate existing ones.

Conversion rates- the percentage of customers at one stage who move to the next funnel allows marketers to identify any bottleneck stage or barrier to building a loyal customer franchise.

Managing the Customer base

• Customer profitability analysis and the marketing

funnel help marketers decide how to manage groups of customers that vary in loyalty, profitability,

and other factors. Winning companies improve that value by excelling at strategies like the following:

1. Reducing the rate of customer defection
2. Increasing the longevity of the customer relationship
3. Enhancing the growth potential of each customer through "share of wallet," cross-selling, and up-selling
4. Making low-profit customers more profitable or terminating them.
5. Focusing disproportionate effort on high-profit customer .

Building Loyalty

Creating a strong, tight connection to customers is the dream of any marketer and often the key to

long-term marketing success. The following sections explain three types of marketing activities companies are using to improve loyalty and retention.

1. INTERACTING WITH CUSTOMERS

• Listening to customers is crucial to customer relationship management. Some companies have created an ongoing mechanism that keeps the marketers permanently plugged in to frontline customer feedback.

1. DEVELOPING LOYALTY PROGRAMS

Frequency programs (FPs) - are designed to reward customers who buy frequently and in substantial amounts.86 They can help build long-term loyalty with high CLV customers, creating cross-selling opportunities in the process.

Club membership programscan be open to everyone who purchases a product or service or limited to an affinity group or those willing to pay a small fee.

1. Creating Institutional Ties

The company may supply customers with special equipment or computer links that help them manage orders, payrolls and inventory.

1. Winbacks

Some customers inevitably become inactive or drop out, so they need to reactivate them through win back strategies.

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