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Customer Regain
Management
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Regain Management
Customer acquisition and retention are
important and equally important is to regain a
lost customer.
It is all about winning a lost customer back.
Traditional methods depend on externaldatabases whereas in regain management it is
based on already existing customer data.
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Regain Management
Goal of customer regain management is to
reinitiate valuable customer relationships,
which have been already terminated.
Regain management has to detect such lost
customers, select valuable relationships and
attempt to regain them in an effective and
efficient way, for which a systematic process isnecessary.
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Sub-processes of Customer Regain
Management
Goals and
Strategies
Identification SegmentationDialogue
InitiationRegaining
Process
Control
Information base and exchange
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Customers regain goals and strategy
development
Defined on a top level and then broken downgiving measurable goals and objectives for singleprocesses.
Reactivates terminated customer relationshipsand pursues profits in most of the cases.
Also helps to prevent negative image spread bythe lost customer.
Collects information on termination process andpatterns, serves as a basis for future course ofaction.
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Identification
In order to regain lost customers, first
terminated relationships have to be identified.
External termination with direct expression.
Internal termination without direct
expression.
Some mechanisms have to be implemented todetect the internal termination cases.
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Segmentation
Segmentation can be based on:
Profitability potential (profitability-oriented
customer segmentation)
Regaining probability (success-oriented customer
segmentation).
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Profitability oriented segmentation
ABC analyses
scoring models (evaluation by means of several
weighted criteria)
customer-lifetime-value calculations
(considerations of future contributions).
Success-oriented segmentation Based on the probability of regaining the
customer.
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Dialogue initiation
After the problem identification and
segmentation the dialogue can be initiated.
It can be in any form..written, oral (call-centre)
or any other customised form.
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Regaining
Regaining offers are made.
Previous faults should be avoided.
Only if the customers assume anenhancement of the relationship they will be
willing to reinitiate the former relationship.
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Process control
Efficiency and Effectiveness Management.
Effectiveness could be measured by the ratiobetween the number of re-activated relationships
and the targeted or contacted customers. Efficiency could be calculated as the ratio of
regaining costs (costs of identification,segmenting, dialogue initiation, progress control
and regaining offers) and the actual regainingbenefits (actual customer value, quantifiedcommunication and information benefits).
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Regain Management with CRM
Cleartrip
In the morning a person spent 20 minuteslooking for trains. Even after finding a train, he
couldnt book tickets due to excessive serverload at cleartrip.
So he closed the window and resumed his
work.20 minutes later, he gets an email fromCleartrip folks with this message.
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Customer
Life
Cycle
(CLC)
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CLC
Customer Life Cycle is the journey of the
customer from getting attention to becoming
a customer and finally being retained and
associated for a long time with an
organisation.
With the CLC approach, organisations look
forward not only to selling, but try to manageeach and every interaction and touch point.
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Phases of CLC
Reach
Acquisition
Conversion Retention
Defection
Marketing Strategies related to CLC
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Customer Lifetime Value (CLV)
CLV is the present value of all future purchases
made by the customer minus the costs
incurred by the company.
Also known as CLTV or LTV.
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What are your customers worth?
S = average revenue per customersale
C = costs of servicing customer
V = expected # sales per year
Y = expected # years customer willuse your services
A = cost of acquiring new customer
N = # of referrals from customer
F = correction factor
Lifetime Value ofCustomer(CLV)
=[(S-C)*(V*Y)-A+(A*N)]*F
OR Margin * # sales cost of
acquisition + savings from referrals
* correction factor
Customer Lifetime Value = CLV
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What are your customers worth?
S = average revenue per customerper sale
C = costs of servicing customer
V = expected # sales per year
Y = expected # years customer willuse your services
A = cost of acquiring new customer
N = # of referrals from customer
F = correction factor
S = Rs. 20,000
C = Rs. 5,000
V = 2
Y = 5
A = Rs. 1500
N = 4
F = 1.2
CLV = [(Rs.20000-Rs.5000)*(2*5)-Rs.1500+(1500*4)]*1.2
CLV = Rs.185,400
Customer Lifetime Value = CLV
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Applications of CLV
Allocation of resources
Customer Selection
Segmentation
Merger and Acquisition
Customer Equity
Marketing Campaigns
CLV Based Loyalty Programmes
Purchase Sequence Analysis
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Assignment
Prepared a detailed comparative analysis of
the marketing strategies adopted during reach
and retention phases of CLC by a DTH
company in India. Also, prepare a metrics
containing the indicators which can be used to
measure the success of these marketing
strategies.
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Submit your assignments on
By 14th August, 2012.
Subject: CRM Assignment Roll No.Mention your name and your roll number clearly in the
assignment. No two assignments should be the same.
mailto:[email protected]:[email protected]