Analysis of an Unsolved Problem, Essay Example

What is the Problem?

Client attrition is among the most precarious and least well comprehended portents in management. Numerous companies yield as many clienteles as they obtain every year and the extensive implementation of “free checking” has depressed the hurdles, which makes it easier for clients to make a defection to other firms and companies.

What are the Alternatives?

The alternative to client attrition is implementation of fidelity programs and short term campaigns. The basic to calculating the effect of fidelity programs is that these programs function as vibrant incentive patterns by providing remunerations based on collective procuring and buying over time. Intrinsically, fidelity programs inspire consumers to move from prejudiced or single-period choice making to self-motivated or multiple-period choice making approaches. Short term campaigns enhance Repeat purchasing that might also stimulate buying through numerous means, for example, short-term price cuts on goods or cheap shipping charges.

Advantages

Fidelity programs inspire repeat purchasing and thus increase retention rates by offering incentives for clienteles to buy more regularly and in greater volumes. Short term campaigns have increased customer attrition and encouraged sales in companies.

Disadvantages

When the fidelity program is ineffective, it is typically up to the communication center or rather the company to “protect and save” the client. These short term campaigns are usually expensive and might led to losses.

What is the Solution?

For a regularity program to be operative in accumulating loyalty, it ought to encompass a structure that inspires clienteles to vision purchases as a system of connected resolutions rather than as autonomous transactions (Blattberg, Kim & Neslin, 2008).

For that reason, it is imperative to cultivate models that can concurrently approximate the effect of self-motivated and present influences on long-term consumer behavior.

Reference

Blattberg, R. C., Kim, P., & Neslin, S. A. (2008). Database marketing: Theory and practice. New York: Springer.