- Marketing information system: It provides information about the business environment, including competitors, industry trends, and macro environmental variables.
- Sales-force management system: It automates some of the company’s sales and sales-force management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance.
- Customer service system: It automates some service requests, complaints, product returns, and information requests.
Steps for Reducing Customer Defection Rate
- Define measurement basis for retention rate: For reducing customer defection rate, first of all, the measurement basis for retention rate should be defined. For a newspaper, renewal rate is a measure of retention. For college, it is admission in second year after completing first year.
- Analyze causes of defection: For reducing customer defection rate, the reasons for defection should be analyzed. The major reasons for defection can be poor service, poor products, high price, inconvenient distribution etc.
- Calculate loss of profit: Customer defection results in loss of profit. Profit loss from lost customer should be calculated in terms of life time value of lost customers.
- Introduce anti-defection measures: For reducing customer defection rate, the company should introduce anti-defection measures such as extra benefits and services that add value.
- Find out cost of reducing defection rate: The cost of anti-defection measure such as extra benefits or services should be calculated. The cost should be less than benefits of reducing defection rate.
- Listen to customers: Customer feedback is essential for reducing defection rate. Exit interviews of customers can also be useful. Complaints and suggestions should be carefully handled.