Retention. Before we talk about specific retention, we need to consider the goal of retention. To make more money, to grow the company.
Is 100% desirable? Probably not. This is where it is so critical to know your customer margins. Often it is the least profitable customers that perceive the least value from your offering. As a result, you invest a disproportionate amount of time in trying to convince them to stay. This of course increases your costs on these customers and decreases your margins. Additionally, it’s probably diluting your focus on the most valuable customers. Company’s often resort to special offers to convince them to stay…which often have to be offered to the good customers as well; adding no value to the relationship but hurting their profitability too.
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