On this page:
- It ain’t over ’til it’s over: Winning back customers
- Marketing student completes coveted Sydney internship
- Helping students get smart with money
16 April 2014
A sales firm inevitably loses customers no matter how well it is doing -- but is it worth trying to win them back?
A recent study by Dr Annie Liu from the School of Marketing and International Business, and Mark Leach from Loyola Marymount University in the US, evaluates customer reacquisition in business-to-business markets, and proposes a formula that sales companies can use to evaluate whether to invest time in wooing lost customers.
According to Dr Liu, previous research shows it is seven to 10 times more costly to gain a new customer than to retain one.
"It's very important to hold on to what you’ve got rather than invest energy in finding new customers."
Sales executive and sales account managers from 98 New Zealand companies and 50 firms in the United States were interviewed to find out what methods they had found most successful in winning back customers.
"We found that only about 10 percent of sales companies have a formal procedure when they lose an account," says Dr Liu.
"Without guidelines, most account executives end up going with their instincts, but our research advocates a formal process."
The first step, says Dr Liu, is to make contact with the customer and assess the likelihood of winning them back. It is important to know who or what is responsible for losing the customer, and to identify what type of customer they are.
"Generally there are four different types of customer: those who are unhappy because of negative experience or perception; those who have been bought away by another company; those who have decided to move to a competitor that is more aligned with their values; or those who don’t need your product or service any more."
The approach of a salesperson should differ according to customer type.
"For instance, unhappy customers may require an apology and a price discount to restore good faith, whereas those customers seeking different values may lead you to re-evaluate your strategy, which could lead to long-term success."
Dr Liu says customers that are motivated by getting the cheapest deal may not always be the most desirable.
"If they are easily bought away and can be easily bought back how much do you want to play this price war game? If they are a high maintenance customer that calls every day and wants everything customised, low price, and special delivery it might be better to let them go.
"However, if they bring in a lot of money for your business or connect you to other customers it’s worth going the extra mile."
Dr Liu says active engagement with customers is essential, to resolve any issues before they reach crisis point.
"It's important to maintain good relationships so you understand your customer's needs. Also, you need to be aware of their purchasing patterns -- if you see a decrease you need to find out why before you completely lose them."
27 March 2014
This summer, Victoria Business School student Mathew Rex did an internship at the Hong Kong Economic and Trade Office (HKETO) in Sydney, Australia.
"The internship has definitely given me insight into the inner workings of a diplomatic office, which is something I've considered as a career for a while," says Mathew, who is in his honours year in a Bachelor of Commerce in Marketing.
Mathew's duties included assisting the research and project team on several projects, mostly relating to New Zealand.
"I helped write briefs for upcoming visits to New Zealand by Hong Kong dignitaries, updating current information on our country as well as general research tasks."
There were many ‘first time’ experiences at HKETO. For example, this was the first time he lived and worked away from home and it was also his first work experience in a government environment.
"This internship is my first experience of working full time and I’ve since experienced a range of different challenges like learning how to manage projects and deal with a wide range of stakeholders," says Mathew.
Mathew, who heard about the internship on the university’s careers website, said the experience has helped him master real-life applications of knowledge he’s acquired from his studies.
He said the highlight of the eight week internship was his work on the youth strategy, a project aimed at promoting Hong Kong to Australian and New Zealand working young professionals, university students and high school students.
Mathew strongly recommends other Victoria University of Wellington students to apply for future HKETO internships.
"The people here are lovely and the office and location are fantastic. The work at HKETO is interesting and challenging and best of all you get to live in Sydney for two months. What's not to like?"
About the Hong Kong Economic and Trade Office
The Hong Kong Economic & Trade Office (HKETO) in Sydney is the representative office of the Government of the Hong Kong Special Administrative Region, established in 1995 to strengthen economic and cultural ties with Australia and New Zealand.
19 February 2014
A Victoria Business School student has played a key role in designing a new tertiary student banking package which is being launched as part of orientation activities.
Matt Barnes, who completed a Bachelor of Commerce with Honours in Marketing at Victoria in 2013, has worked on the project for The Co-operative Bank as part of Victoria’s Summer Research Scholarships programme, with academic supervision provided by staff from the School of Marketing and International Business.
Now in its fifth year, the programme sees Victoria partner with companies, government agencies and professional groups to help fund a research placement for some of its top performing students, while also helping organisations tackle research projects they want carried out.
As part of his work in helping to design a student-friendly package, Matt convened a focus group of other students from Victoria to find out more about how they manage their finances and what they want from their bank.
"It was interesting to see that there are gaps in some students’ knowledge about controlling their finances," says Matt.
"A number of them didn’t know the extent of the fees they pay, how the services they get compare to what’s offered to other customers or how they go about switching banks."
As well as gathering feedback from people who might sign up for the package, Matt had to explore ways in which The Co-operative Bank could compete with bigger players in the tertiary student segment of the market.
The package developed, which will be available nationally but introduced at the University of Canterbury initially, is designed to help students manage their money through the ups and downs of a university year.
"What students tell us is that their finances are cyclical -- at the start of the year they usually have funds in their account from summer employment but that changes as the year progresses," says Matt.
"What we are doing, which is a point of difference, is offering a high interest savings account which gives students a better return in the up parts of the cycle."
Grant Pritchard, Deposits Portfolio Manager for The Co-operative Bank, says using Victoria’s summer research programme gave the bank a fresh perspective.
"As well as bringing new ideas, the rapport Matt was able to create with the focus group of other students was priceless. He got much more out of that group than our staff or even a professional facilitator could have."
Matt says one of the best things about his involvement in the project was the opportunity to put what he had learned at university into practise.
"I did my Honours dissertation on retail banking so it was a perfect opening for me. Overall, it's been a great experience to be involved in something that has been made for students with the help of other students."