Customer retention has become a multifaceted and serious consideration for businesses. With the rapid advancement of technology, a growing competitive climate, and the ever-increasing platforms and channels available for customers to purchase services and products, the importance of servicing and engaging with current customers is becoming increasingly evident from a business profitability and sustainability perspective.
While after-sale value-added benefits offered to customers through upselling initiatives are believed to be necessary to increase customer retention, further understanding of the type of value-added benefit offered and the timing in which it is offered following the core product sale, is required to determine the extent of the impact it has on customer retention. It is therefore incumbent on companies to develop a robust customer retention strategy that integrates value-added benefits to upscale customer retention and prevent customer churn.
The researcher explored the effectiveness of value-added benefits offered via upselling as a strategy to reduce customer churn within a selected authorised financial services provider based in KwaZulu-Natal, South Africa. A descriptive research design was followed. The researcher conducted a thorough literature review aligned to valueadded benefits as an innovative strategy to retain customers. Data was collected through a combination of tools, case studies, open-ended semi-structured employee interviews and open-ended employee questionnaire surveys, to explore a facet of customer churn where limited theory is available, and to describe the extent to which the offering of a value-added benefit to a current customer affects customer retention.
From the research conducted, the researcher concluded that customers who had taken up a value-added benefit were more likely to stay with their service provider, compared to customers who did not have a value-added benefit. Churn rate percentages for customers with core product-aligned value-added benefits were lower than the customers with core product non-aligned value-added benefits, and customers who had taken up a value-added benefit, before their first debit order was collected by their service provider, were less likely to churn than customers who took up the same value-added benefit after their first debit order was collected by their service provider.
Table of contents
CHAPTER ONE: INTRODUCTION AND BACKGROUND TO THE STUDY
1.1 Overview
1.2 Problem statement
1.3 Objectives
1.4 Key questions/hypotheses
1.5 Research design
1.6 Research method
1.7 Sampling
1.7.1 Sampling population
1.7.2 Sample size
1.7.3 Sample method
1.8 Data collection tools
1.9 Data analysis methods
1.10 Reliability, validity and trustworthiness
1.11 Ethical considerations
1.12 Limitations
1.13 Structure of the dissertation
1.14 Conclusion
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual framework
2.3 Customer lifetime value
2.4 Customer churn and customer retention
2.5 Reasons for customer churn
2.6 Retaining the right customers
2.7 The importance of appealing to customer needs
2.8 Customer value perception
2.9 The effect of customer development on customer loyalty
2.10 The effect of customer engagement on customer satisfaction
2.11 The importance of relationship quality and customer trust
2.12 Organisational reputation, employee motivation and customer retention
2.13 The effect of multiple products on customer churn
2.14 The effect of the social environment on customer churn
2.15 The customer service channel and its effect on customer retention
2.16 Market competition and customer retention
2.17 Value-added benefits and customer retention
2.18 Conclusion
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research questions/hypotheses
3.3 Research approach
3.4 Research design
3.5 Research method
3.6 Sampling
3.6.1 Sample population
3.6.2 Sample size
3.6.3 Sample method
3.6.4 Data collection tools
3.6.5 Data analysis methods
3.7 Reliability, validity and trustworthiness
3.8 Ethical considerations
3.9 Conclusion
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction
4.2 Data presentation and analysis
4.2.1 Quantitative data presentation and analysis – three case studies
4.2.2 Qualitative data presentation and analysis – Lock-in department employee semi-structured face-to-face interviews
4.2.3 Qualitative data presentation and analysis – Lock-in department employee open-ended questionnaire surveys
4.3 Conclusion
CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
5.2 Summary of the research findings
5.3 Recommendations
5.4 Directions for future research
5.5 Limitations of the study
5.6 Conclusion
Research Objectives & Core Topics
This study aims to determine the effectiveness of upselling value-added benefits as a strategy to reduce customer churn and enhance retention within a financial services provider in KwaZulu-Natal, South Africa.
- Effectiveness of value-added benefits in reducing customer churn.
- Influence of alignment between core products and value-added benefits.
- Optimal timing (recency) for offering value-added benefits post-purchase.
- Role of employee motivation and engagement in customer retention.
- Impact of service delivery channels on customer loyalty.
Excerpt from the Book
2.1 Introduction
The market is defined by what products and services are acquired, and by whom. Customers are perceived as submissive targets of the value created by organisations, however, it is vital for an organisation to perceive customer value as a consistent and ongoing relationship whereby the value is continuously co-created, rather than transferred only during the point of purchase (Bettencourt, Lusch and Vargo, 2014).
Customer retention has become a multifaceted and serious consideration for businesses. With the rapid advancement of technology, growing competitive climate, and the ever-increasing platforms and channels available for customers to purchase services and products, there is robust evidence which states that corporations can lose up to 50% of their customers over a period of five years (Ganesh, Arnold and Reynolds, 2000).
To increase customer profitability, an organisation may focus on increasing customer retention and decreasing customer turnover, also referred to as customer churn (Murphy, 1996). Ensuring customer retention and decreasing churn are some of the most important strategic priorities of any financial services organisation, as each new customer brings with them the potential for a lifetime of profit to the service provider (Bernstel, 2002).
Summary of Chapters
CHAPTER ONE: INTRODUCTION AND BACKGROUND TO THE STUDY: This chapter introduces the research topic, defines the problem statement, outlines the study's objectives, and details the research design and methodology used.
CHAPTER TWO: LITERATURE REVIEW: This chapter provides a comprehensive review of existing concepts and models concerning customer lifetime value, customer churn, and retention strategies.
CHAPTER THREE: RESEARCH METHODOLOGY: This section elaborates on the research approach, including sampling, data collection tools, and data analysis methods utilized for the study.
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS: This chapter presents the quantitative and qualitative data gathered from three case studies and employee interviews, alongside an analysis and discussion of the findings.
CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS: This final chapter summarizes the research findings, provides actionable recommendations for the company, and suggests directions for future research.
Keywords
Customer retention, Customer churn, Value-added benefits, Upselling, Customer lifetime value, Financial services, Customer engagement, Customer satisfaction, Employee motivation, Service delivery, Customer loyalty, Market competition, Data triangulation, Case study, Churn reduction.
Frequently Asked Questions
What is the primary focus of this research?
The research investigates the effectiveness of using value-added benefits as an upselling strategy to improve customer retention and decrease churn within a financial services company.
What are the central thematic fields?
The work covers customer relationship management, customer satisfaction, service delivery, employee motivation, and the impact of product alignment on customer loyalty.
What is the primary research objective?
The main objective is to establish if offering value-added benefits increases customer retention and to determine the ideal timing and nature of these offers to optimize the customer relationship.
Which scientific methodology is employed?
The study uses a sequential mixed-method approach, combining quantitative data from three case studies with qualitative insights from semi-structured employee interviews and open-ended questionnaires.
What topics are covered in the main section?
The main sections analyze the link between customer engagement and retention, the role of employees, the influence of social environments, and the strategic timing of product offers.
Which keywords best describe the research?
Key terms include customer retention, churn, value-added benefits, upselling, customer lifetime value, and customer engagement.
How does core-product alignment affect churn?
The study concludes that value-added benefits aligned with the customer's core product are more effective at reducing churn than non-aligned offers, as they provide clearer value to the customer.
Why is the timing of the value-added benefit offer important?
Evidence from the case studies suggests that offering value-added benefits shortly after the initial core product sale, especially before the first debit order, creates a foundation of trust and reduces the likelihood of policy cancellation.
What role do employees play in the retention strategy?
Employees are identified as critical contributors; motivated and customer-centric agents play a vital role in successfully communicating value and building trust, which directly influences retention rates.
- Quote paper
- Samantha Worthington (Author), 2017, Harnessing value-added benefits as a customer retention strategy in a selected company within the financial services industry in KwaZulu-Natal, Munich, GRIN Verlag, https://www.grin.com/document/439165
