Marketing91

  • Home
  • All Tutorials
    • Marketing
      • Advertising
      • Branding
      • Sales
      • Retailing
      • Consumer Behavior
      • Customer Management
      • Distribution
      • Market Research
      • Pricing
      • Product Management
      • Strategy
      • STP Marketing
      • Services Marketing
    • Digital Marketing
      • Blogging
      • SEO
      • E-commerce
      • Email marketing
      • Social Media Marketing
      • Facebook Marketing
    • Brands Analysis
      • Marketing Mix
      • SWOT of Brands
      • Strategies
      • Competitors
      • Lists
    • Management
      • Communication
      • Leadership
      • Decision Making
      • Team Management and Delegation
      • Organizational Management
      • Motivation
      • Personal Development
      • Project & Risk Management
      • Time Management
      • Operations Management
    • Careers
      • Interviews
    • Business
      • Business Models
    • Human Resources
    • Skills
  • News
  • About Us
    • Contact Us
  • Academy
Home » Marketing » Offering financial benefits for customer retention

Offering financial benefits for customer retention

June 12, 2023 | By Hitesh Bhasin | Filed Under: Marketing

There are two financial benefits which a firm can offer for customer retention. First would be frequency programs (FP) and the other is club marketing program.

Frequency programs (FPs) – The frequency programs are in essence awards given to a customer who buy regularly and in substantial amount. The frequency program works on the 80-20 model wherein it believes that 80% of the business will be driven by 20% of repeat customers. American airlines was one of the first companies to introduce frequency program wherein it gave free mileage credits to its customers. It was soon followed by Marriott which started its honored guest program. Credit card companies too were soon to adopt this function and started offering points on card usage.

Financial benefits for customer retention

Data suggests that the first company to introduce frequency programs benefits the most. However once competitors start copying the strategy, frequency programs can become a burden as you have to increase your offerings. This also opens room for creativity and therefore there are airlines nowadays who offer different kinds of loyalty programs based on the customers flying habits thereby customizing the program altogether.

Club Membership – Another financial benefit which can be given is when customers are offered to become a part of a club exclusive to the brand. Club memberships can be of the open type wherein anyone who buys a product or a service can be given entry or it can be the exclusive types wherein either there is a criteria for entering the club or you have to make a payment to be a part of that club.

Although the open type is useful to retain large number of customers as well as to attract competition customers, the closed type and exclusive clubs attract and retain customers for a longer time. Some of the highly successful clubs include the Apple owners club which is comprised of around 600 small as well as large groups. Similarly the Harley owners group (H.O.G) has over a million customers and is one of the best known examples of product memberships.

Thus both frequency programs and club memberships play an important part in retaining customers and are excellent financial tools for the organization.

Also Read  What is Market Attractiveness? Importance, Examples and Factors

Liked this post? Check out the complete series on Customer Management

About Hitesh Bhasin

Hi, I am an MBA and the CEO of Marketing91. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. You will generally find me online at the Marketing91 Academy.

Related posts:

  1. Customer Retention – Meaning, Importance and Strategies
  2. Building structural ties for customer retention
  3. Customer Retention Strategies
  4. What is Customer Equity? Components of Customer Equity
  5. What is Customer Feedback? 7 Types of Customer Feedback
  6. What are Customer Insights? Importance of Customer Insights
  7. How to Gain Customer Loyalty? 10 Ways To Gain Customer Loyalty
  8. How to get Customer Testimonials? 9 Customer Testimonial Examples
  9. How To Apologize To A Customer? 10 Tips to Apologize to Customer
  10. Customer Persona – Meaning & Best Tips Develop a Customer Persona
Not found what you are looking for? Search this website.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement
Recent Posts
  • Digital Marketing: Definition, Importance, Types, Skills and Tools
  • 9 Characteristics of Quality
  • What is Television Advertising? Characteristics, Types & Examples
  • What is Women Entrepreneurship? Features, Functions and Characteristics
  • Consignment Sales: Definition, Advantages and Disadvantages
Advertisement

Marketing91

MORE INFO

  • About Marketing91
  • Marketing91 Team
  • Privacy Policy
  • Cookie Policy
  • Disclaimer
  • Terms of Use
  • Editorial Policy
  • Advertise
  • Contact us
  • Sitemap

WE WRITE ON

  • Marketing
  • Management
  • Strategy
  • Skills
  • Careers
  • Digital Marketing
  • Business
  • Human Resources
  • Operations Management
  • Marketing News
  • SWOT's
  • Marketing mix's
  • Competitors
  • Strategies
  • Lists
Search
[email protected]

Copyright © 2023 Marketing91 All Rights Reserved