Customer defection in small businesses: The importance of retention analyses in travel agencies

“Closing the back-door costs less than luring prospects to the luxuriously designed front entrance” (Peelen & Beltman, 2013). On this basis, customer relationships in travel agencies should be managed. According to Peelen and Beltman (2013), the entire remaining life-time value is ‘secured’ – by retaining the customer for the organisation. Therefore, advantages of this method should be enhanced rather than underestimated.
A travel agency should deal with the following questions in order to cope with potential losses of clients. Who is leaving the company and what drives them to leave? What does the agency need to do to prevent this to happen? Is there another way of customer’s behaviour than exploratory analysis? How much time and money needs to be invested?
Retention analysis is a substantial tool in order to predict the likelihood of a customer leaving the company (Gustafsson, Johnson & Roos, 2005). A travel agency might not have all the required knowledge or resources to perform an in-depth data analysis. Nevertheless, the following will show that it does not require much to be able to understand minor changes in a customer’s data. Given, that a client books a holiday through a travel agency on a 6 months basis, and suddenly stops or only books once a year might be the first indication of him or her ending the relationship. When saving this kind of data, the travel agency is able to trace abnormal buying behaviour of clients. Those clients can be approached through sales calls. Asking the clients why they haven’t booked a trip with the agency during the past months might give an understanding of the customer’s motives. After all it is important to use this information in a way that helps to ‘close the back-door’ of the business. Noticing criticism is just the beginning. Travel agents should show initiative to turn feedback into improvements within their line of approach.
Peter Marsh sees in “Customer retention: a strategy for travel agents” the vision as one of the vital points within a retention analysis. He argues that the way in which staff as well as clients describe the organisation should be compatible for the purpose of realising satisfying performance. A target needs to be set. Staff and management should be on the same page regarding the overall goal. The next step is to generate ideas to create regular contact with valued customers. It is advisable to work out a plan when and how to approach clients.
After implementing the above, travel agencies can review the work done and draw conclusions on the outcomes.

Sources:

Peelen, E., & Beltman, R. (2013)Customer relationship management. Boston : Pearson, 2013

Anders Gustafsson, Michael D. Johnson, Inger Roos (2005) The Effects of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention. Journal of Marketing: October 2005, Vol. 69, No. 4, pp. 210-218.

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