Customer Retention

Forming the foundation of Customer retention there are a few things that have to be taken into consideration. “According to Foa and Foa’s (1974) social interaction theory which is applicable to the concept of business and marketing resource exchange, exchange resources are identified and classified into six categories and entities;” (Zineldin, 2000)

1. Goods
2. Services
3. Money
4. Information (including know-how)
5. Status, and
6. Love

Foa & Foa also argues that, “For the consumer, the entities exchanged depend on the following five values (Foa & Foa, 1974):” (Zineldin, 2000)

1. Functional value: which is related to i.e. reliability, durability, availability, performance, and price.
2. Social value: which concerns the association with positively or negatively stereo typed demographic, socioeconomics, and cultural ethnic groups.
3. Emotional value: which is associated with specific feelings and facilitating or perpetuating feelings i.e. comfort, security, excitement, romance, passion, anger, fear, guilt, friendship, loyalty, and trust.
4. Epistemic value: which is related to the ability to the ability and capacity to providing something curious, new, or different.
5. Conditional value: which is a result of a specific unplanned situation faced by the choice maker that is likely to change a prior decision.

However, Zineldin (2000) further argues that, “the exchange paradigm outlined above can be summarized in the form of three meanings:” (Zineldin, 2000)

1. Object related. Functionary value and utilitarian meaning. Goods/Services are given in return for money or other goods. Something tangible of value for something tangible in value. The physical attributes, reliability, durability, availability, performance, and price are the most important factors in evaluating the value/meaning of the exchange.
2. Process related. Symbolic meaning s which transfer psychological/ emotional, social, epistemic, conditional, or other intangible values. These values and meaning s are the most important factors in evaluating the exchange and relationship process.
3. Mixed related. This type of exchange integrates the objective functional/ utilitarian meanings with the symbolic meanings (process related) or the tangible and intangible attributes and meanings of the exchanged value.

Nevertheless, the customer retention concept is a more one way of looking at customer relations, although more focused on the commitment and long-term perspective of the relationship. Zineldin (2000) argues that, “Customer and retention can be defined as a commitment to continue to do business with a particular company.” (Zineldin, 2000) To further summarize the concept of relationship building Gronroos argues that the following ideas act as the foundation for relationship building; (Gronroos, 2002)

• Sense of security
• Feeling of control
• Sense of trust
• Minimizing risks
• Reduced cost of being a customer

Zineldin (2000) argued that, “the following basics can logically be deduced or derived from creating and enhancing any long-term relationship:” (Zineldin, 2000)

1. Seeking ways to develop formal, ongoing relations with customers or companies.
2. Ensuring repetition of transaction and /or ongoing exchange relationships (customer retention and loyalty)
3. Focusing on the customer’s needs
4. Create an environment that concentrates on customer satisfaction
5. Making a client understand that the satisfaction of needs is important to the company
6. Understanding the customer and the nature of the seller-customer relationship:
   • What motivates the customer to consider a purchase or a relationship?
   • What factors will stimulate the customer to actually buy or be in a close and long-term relationship?
   • Why do customers leave the company/relationship?
   • How can the marketer facilitate a transaction that will satisfy the client’s needs and allow the company to make a profit?