Question

Which of the following is not a step in monitoring and reducing the customer defection rate?

A. Define and measure the customer retention rate.
B. Distinguish the causes of customer attrition and identify those that can be better managed.
C. Determine the competitive advantage that would attract customers.
D. Figure out how much it would cost to reduce the defection rate.
E. Estimate how much profit it loses when it loses a customer.

Answer 1

Determining the competitive advantage that would attract customers is not a step in monitoring and reducing customer defection. It's related to market positioning and attracting new customers, rather than directly addressing retention and churn issues.

Step-by-step explanation:

Among the listed options, the one that is not a step in monitoring and reducing the customer defection rate is C. Determine the competitive advantage that would attract customers. The steps usually involved in managing customer churn focus on understanding and measuring the current customer base and retention dynamics, identifying reasons behind customer turnover, and estimating the financial impact of losing customers to implement strategies for retention. Identifying competitive advantages may be part of a broader strategy to enhance overall market positioning and attract new customers, but it is not specifically a step in the process of monitoring and reducing the rate at which customers stop doing business with a company.