Question

As discovered in previous research, the premium pet industry was not impacted from the recession and continues to grow. You have been approached by an individual who wants to open up a pet food delivery service. Customers will either call an 800 number or go online and place orders for pet foods. The pet foods will then be delivered to the home within 24 hours of the order placement. For an additional fee, the delivery person will place the purchased product in the home and, if necessary, will put the food into a receptacle for the pet owner.

The person wants to open up the business in the greater Tampa/St. Petersburg area. However, the person is uncertain as to the type of person they should consider approaching as customers. They do not know who their target market is.

Reflecting on the above from a Marketing Strategy Perspective, address the following issues:

Question:

Develop a customer retention program for this business. Discuss the concept of customer orientation and the importance of a customer retention program and what factors should be considered for this business. Identify the type of information the company needs to design this program and from where the company will obtain this information.

Answer 1

Customer retention refers to a compilation of activities which an organization implements to increase the number of repeat consumers and earnings from each existing customer. Thus customer retention strategy facilitates to offer and extract more value from your accessible customer base as it assists in ensuring the acquired consumers remains with you and keeps getting the exceptional value from your goods and services.

Furthermore for an effective and efficient customer retention strategy it’s very significant and crucial for an organization to precisely determine how much time and resources it would like to assign and allocate to each of their customer base which indeed is completely dependent on the operational activities of a company..

Thus an organization where customers regularly keep procuring high value items will indeed facilitate them to attain the highest customer lifetime value (CLV). These kinds of businesses are expected to gain the most from a solid retention strategy. Furthermore it’s also very important to acknowledge the matter of fact that repeated customer rate is indeed considered to be the most significant and crucial factor for an efficient and effective retention marketing strategy as it facilitates to measure the percentage of customers who are in fact actually very enthusiastic to do a second purchase from your enterprise.

Thus by correctly measuring your repeat purchase rate indeed can facilitate you to precisely examine and evaluate the effectiveness, efficiency and performance of your customer retention strategy. Furthermore higher the metric rate more the customers would be eager to purchase from your enterprise thus the existing consumer base indeed is considered to be the most crucial and significant asset of your business. It facilitates to signify that customers do recognize, comprehend and appreciate your brand.

Various studies and research have effectively elucidated that it costs ten times more for an organization to create a new customer than to maintain an existing one. Thus if you have a small consumer base and if you lose few customers then it can create significant financial crisis for your enterprise and similarly if you have a large consumer base a small enhancement in your consumer retention rate in fact can significantly boost your earnings.