Harnessing value-added benefits as a customer retention strategy in a selected company within the financial services industry in KwaZulu-Natal
Thesis (M.A.) from the year 2017 in the subject Business economics - General, grade: -, , course: Masters of Business Administration, language: English, abstract: 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.