Research On Customer Retention Based On Value Analysis

With continuous development of technology especially the highly development of information technology, great changes have taken place in the current market since this century. On the one hand, with the improvement of market communication channels, the characteristics of product quality and service are growing convergence, and the real discrepancy has been difficult to come true. On the other hand, customers have more and more choices on products, services, communication channels and options, and the transfer cost becomes lower and lower, thus customers have much control on enterprises'business activities, all of which making maintaining and raising customer loyalty more and more difficult.In current market setting, the competition among enterprises is no longer a mere product-based competition. Raising the quality of service, acquiring customer resources effectively, mining depth customer information, maintaining customers effectively and reducing customer churn rate have been the key points to sustainable competitive advantage. Therefore, how to suppress customer drain efficiently and keep the sustainable relations between the customers and enterprises have become to the focus in theorists and practices. Therefore, on the basis of home and abroad customer value and retention theories, combining the latest theory of long-tail, making the customer data of a TV shopping business as empirical study sample, this article carries out the empirical study. The study aims to discuss whether the main benefits of enterprises come from the key customers or not and how to maintain the customers effectively based on customer value evaluation.The main conclusions of the study are: (1) Based on the construction of value evaluation index system of TV shopping customers and the analysis of customer value, this study found that the 86.27 percent of customers of low value but contribute to as much as 50% of the revenue, thus the long-tail theory is applicable in TV shopping industry.(2) The survival analysis found that the age has significant impact on the customers'survival state and the different customer value indexes have different impact on customer risk rate.(3) Combined the results of customer value evaluation and the forecast analysis of customer churn, this study establishes the customer classification matrix with the customer value and churn rate as its two dimensions, and makes the conclusion that the long-tail customers are the main customer groups of the empirical TV shopping enterprise. Additionally, this paper proposes the corresponding retention strategies for every kind of customers.There're two innovations in this paper: (1) The theory of long-tail is proved to be correct and reasonable through the empirical research on customer data of a famous TV shopping enterprise. (2) This paper discusses the basic methods that how to maintain the customers of value effectively through establishing the evaluation index system and classification matrix based on customer value. In view of this, we hope that this study could provide some references to the depth study on customer value evaluating, forecasting and maintaining, also we wish that this study could make up the deficiency of empirical research on the theory of long tail.