Customer Acquisition and Retention Strategies in the Service Industry- A Case Study

Abstract

Sales of any product or service come from two ways. One is through existing customers (repeat sales) and another is through new customers (fresh sales). Retaining existing customers needs a totally different set of strategies than attracting new customers every time. Now-a-days, it is very difficult to retain a customer owing to reasons like competition in the market place, customer education and awareness about the products and brands, deficiencies in customer care, ever changing customer preferences for products, accessibility of products in the market, etc. Hence, marketers are equally focusing on attracting new customers to their fold, which is relatively easier one. As a result, sales are mostly through first time purchases also. Now, the question before the marketers is how to drive customers towards their products. Advertising, Sales promotion, Personal selling are some of the important strategies being used for this purpose. In some cases, they bring desired sales to the firm. American express estimates that 30% of customers would follow their financial advisor to a new firm (Tax and Brown 1998). The study comes out with some valid results. To great extent, it goes in hand with views of AL RIES & LAURA RIES, marketing strategists. They in their best selling book, The Fall of Advertising & the Rise of PR argued that many advertising programmes are mathematical successes and marketing failures. The client might be reaching his targets with enough frequency to create boredom and still not move the merchandise. With PR, you give up the luxury of reaching everybody in favor of reaching somebody who counts.