Last time I talk to you about customer acquisition cost. The lesser the cost, is better your marketing department. But what after that? Maintain a good affordable customer acquisition budget you have to maintain customer loyalty.  The research in this field had proved that highest customer loyalty companies grow at twice than their competitors. It is actually related with an emotional connection. There is no real value in satisfying customers without creating an emotional connection. As I am from a retail background, I had seen several instances like customer came and ask for a particular salesman for assistance. If he is not there customer will leave the showroom and will come back when he is there. There is an advantage in creating such a customer relationship but sometimes it may affect the other way if that salesman leaves the company. Mostly it is based on salesman attitude. The more he enjoy his work, the better he can create relationship with customers.

So we were talking about customer loyalty. By increasing customer loyalty, there are lots of advantages like you can sell your products in high value than market value. If a mistake is made by the company, still the loyal customers forgive this mistake. More over these loyal customers are also a way for marketing, marketing by WOM (Word of Mouth), somewhere we use this term as Mouth to Mouth marketing (MTM). This sort of advertising has more effect than usual advertising. The most impressive advantage is that these loyal customers will have the life cycle greater than other customers.

Raising customer retention rates just by 5% could increase the value of an average customer by 25% to 100%. 5% Improvement in Customer retention translates into a doubling of margins.

For gaining a better loyalty, the primary thing is to train your staff properly. This training must be a continuous procedure by analyzing the customer feedbacks and designing the strategies accordingly.


Customer retention is the basic of advantage of customer loyalty. You can realize that customer retention of 2% can reduce your cost 10%.  As time goes,  we will gain a lot from loyal customers as sales revenue and MTM advertising. Lets see how the customers will grow as time goes

By this graph we can see how the growth on sales happens. This will help to

• Increase the retention rate
• Increase the referral rate
• Increase the spending rate
• Decrease the direct costs
• Decrease the marketing costs
We will talk about the calculation of customer loyalty, how to analyse it etc. soon. Now I am hungry and I am gona take my lunch…
Good Day
ever Anu

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