Customer Retention – the continuous attempt to satisfy and keep current customers actively involved in conducting business.
Churn (or churn rate) – the number of customers who leave a business in a year’s time divided by the number of new customers in the same period.
Defection rate – the percentage of customers who leave a business in one year.
Customer lifetime value – the net present value of profits a customer generates over the average customer life.
Customer intelligence – the process of gathering information; building a historical database; and developing an understanding of current, potential, and lapsed customers.
TRUE & FALSE
1. Customer retention is not as important as attracting new customers.
2. Customers develop a stronger loyalty to those companies that show an interest in them.
3. Existing customers will accept a decline in service without question.
4. Customer lifetime value is the percentage of customers who leave in one year.
5. Customer retention involves conveying to the customer that they are more than just a business contact.
6. When establishing a customer retention program, it is important to examine who your customers are and what specific needs they have.
7. When measuring current customer satisfaction, the upcoming advertising campaign is an important consideration.
8. Informal surveys are statistically measurable and are therefore an extremely reliable source of information.
9. Focus groups are random groups of customers or prospective customers who are brought together to discuss current or future offing’s of a business.
10. Seeking feedback from customers will never result in positive customer retention.