Year of Award
Master of Business Administration (MBA)
College of Business & Professional Studies
customer, value, satisfaction, option, strategy
Client retention is a very important part of the production, service, and quality chain. Some would argue that a reduction in customer defections of 5 percent can boost profits by 25 percent to 85 percent. The healthcare company used as a model typically earns, on average, approximately $100,000 per year from a mature partnering arrangement. On the other hand, the company typically loses approximately $170,000 to open a new partnering agreement. The difference is dramatic. Contract management offers peculiar challenges for customer management. That is, there are generally a smaller number of "customers" in this industry. Each partner contributes significantly to the company's income. Waiting until a contract is canceled or renewed is too late to use as a measure of performance. It is also one of the more important indicators of long-term success for contract management companies. Consequently, it is imperative to develop indicators or determinants of success for performance during the life of the agreement. While there is no guarantee of success, the continuous improvement of processes that lead to customer satisfaction and, by extension, a greater probability of contract renewal is imperative. These processes may be internal or external, but for purposes of monitoring degrees of satisfaction by the partner, they should focus on events that have a significant interface with the partner. The measures should be a combination of process and result indicators developed by multifunctional teams, or natural work teams that are directly and routinely involved in these activities. The challenge is to quantify and objectify customer perception of value added service, which is, by nature, highly subjective.
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Shelton, James D., "The Development of Client Retention Strategies and Processes in a Contract Management Company" (1994). Theses, Dissertations, and Capstone Projects. 201.
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