Strategies for customer retention
Strategies for customer retention play significant role when firm switching to e-commerce. It is a challenge to everyone becasuse customer requires satisfaction better then without any additional cost. If we call the overal customer satisfaction in any and all touch points as the customer experience (CE), thus this become vary challenging.
Text is based on: The Ties that Quandary: DoesCustomer Experience Translate into Customer Retention in an Online Shopping Context? Faheem Ahmad Khan, Muhammad Umer Quddoos, Arslan Ahmad Siddiqi, Muhammad Adeel – thank you.
CE in the context of digital Marketing is now considered a key variable of interest in academic research and business practices. To maximize Customer Retention (CR) rate in an online purchase context, firms use loyalty and satisfaction programs as instruments to maintain and enhance their relationship with customers. Strategies for customer retention
Strategies for customer retention
Consumer Relationship Management (CRM) is classified as a customer centrism program. To gain a competitive advantage casmminf from CRM it must be a run a long time with high quality relationship between the organization and the customer.
Online businesses can apply different CRM strategies to gain a competitive advantage. Firms invest in CR and CE to boost up the overall financial return. Customer expectation differs when company starts selling online – they expectat high quality customer satisfaction or experience at every single touch point.
Retaining customers rezist changes, especialy those with a long-term experience and relationship with the company. It is a different landscape for them and difficult task in switching to online because they know organization and can use a lot of alternatives and choices available for a customer other then online serl-service.
Researchers need to identify the solution to the problem that how to make a long-term relationship with customers on online platforms by making them satisfied and loyal. To make that company needs toprovide a lot of value and customer delight which means making customers feel important and valued at any stage of the purchasing process. Strategies for customer retention
The emergence of online purchases through the Internet open a big market of easy alternatives. It is a challenging situation for marketers. There is an easy way and low cost for the customers to switch from one supplyer firm or brand to another. Thus, marketers are trying to put their efforts into developing long-term relationships with customers. This requires a long-term competitivnes of the offer and a competitive strategies to convince customer to retain.
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Customer Experience Management
- CE-def: Customer Experience (CE) refers to the overall perception and interaction a customer has with a company or brand throughout their buying journey, including aspects such as website usability, product selection, customer service, and post-purchase support.
- CE-trust-loyalty-retention: When customers have positive experiences while shopping online, they are more likely to develop trust and loyalty toward the brand, which translates into customer retention (CR).
- CE-satisfaction-loyalty-retention: A positive CE increases customer satisfaction (CS) and loyalty. When customers have a seamless and enjoyable online shopping experience, they are more likely to continue purchasing from the same brand, leading to higher CR rates.
- CS-repeat purchase- retention: Satisfied customers are more likely to make repeat purchases. If customers have a positive experience with an online retailer, they are more inclined to return and buy from that retailer again, increasing their likelihood of being retained customer.
- CE-word-of-mouth: A great CE can lead to positive word-of-mouth recommendations and referrals. Satisfied customers are more likely to share their positive experiences with friends, family, and colleagues, which can attract new customers to the online storeand contribute to CR indirectly.
- CE-reduced churn: Churn refers to the rate at which customers stop doing business with a company. By providing a superior CE, online retailers can minimize customer dissatisfaction and reduce churn rates. When customers have a positive experience, they are less likely to abandon the brand in favor of competitors. Strategies for customer retention
- CE-brand advocacy: Exceptional CE can turn customers into brand advocates. Advocates actively promote the brand and its products or services, both online and offline. Their advocacy can attract new customers, strengthen brand reputation, and contribute to long-term customer retention.
Customer Satisfaction
Customer satisfaction is the customer’s fulfillment response after consumption (Chen et al., 2021). CS creates judgment about brands that are the mainstay of the customer and brand relationships (Kim et al., 2021). Satisfaction shows the comparison between the expected and actual service experience of the customer (Chen & Lin, 2019). Satisfaction is considered a major outcome of CE (Packard & Berger, 2021). CS is decided by the extent of the difference between the expected value and the value that customers gain from a certain product in an online business.
In marketing terms, satisfaction is a major conceptand concern for firms. Many theories have discussed the relationship between satisfaction and other constructs. The Expectation Confirmation Theory (ECT) by Oliver et al. (1997) explains that customer feels satisfied when service execution and delivery are exceptional. CS as a construct has a strong relationship with trust, repurchase intention, and CL (Cheung Man et al., 2020).
Satisfaction shows the comparison between the expected and actual service experience of the customer (Chen & Lin, 2019). CS has been discussed in two forms: transaction and cumulative satisfaction. Strategies for customer retention.
Customers want memorable positive experiences so that they can share in their circle. CE creates company value and brand value as it affects the customer’s mindset, level of satisfaction, and expected behavioral intention (Barnes et al., 2021). Satisfaction of customers isa significant driver for CR (Solakis et a). Strategies for customer retention.
- H1:Customer experience has a significant effect on customer retention.
- H2:Customer experience has a significant effect on customer satisfaction.
- H3:Customer satisfaction has a significant effect on customer retention
- H4:Customer satisfaction mediates the relationship between customer experience and customer retention. Strategies for customer retention.
- H5:Customer experience has a significant effect on customer loyalty
- H6:Customer loyalty has a significant effect on customer retention
- H7:Customer loyalty mediates the relationship between customer experience and customer retention
Structural Equation Models are models that explain relationships between measured variables and latent variables, and relationships between latent variables. Latent variables are variables that, as humans, we understand as a concept, but that cannot be measured directly. Strategies for customer retention.
Customer feedback analytics: https://mietwood.com/business-analytics-of-customer-feedback
Path Analysis: Path analysis is an extension of the regression model. In a path analysis model from the correlation matrix, two or more casual models are compared. The path of the model is shown by a square and an arrow, which shows the causation. Regression weight is predicated by the model. Then the goodness of fit statistic is calculated in order to see the fitting of the model.
Path coefficient: A standardized regression coefficient (beta), showing the direct effect of an independent variable on a dependent variable in the path model.
Disturbance terms: The residual error terms are also called disturbance terms. Disturbance terms reflect the unexplained variance and measurement error.
Direct and indirect effect: The path model has two types of effects. The first is the direct effect, and the second is the indirect effect. When the exogenous variable has an arrow directed towards the dependent variable, then it is said to be the direct effect. When an exogenous variable has an effect on the dependent variable, through the other exogenous variable, then it is said to be an indirect effect. To see the total effect of the exogenous variable, we have to add the direct and indirect effect. One variable may not have a direct effect, but it may have an indirect effect as well.
Strategies for customer retention.
