Human resources is a very important resource for any organization accounting for substantial costs and in addition having

major impact on total effectiveness of the organization. The human resource function is concerned with acquiring, retaining and using this valuable resource effectively. This definitely cannot be considered a liability for any organization. When human resource management function is carried out effectively and efficiently the contribution it makes to the increasing profitability and value of the organization is many time more than the expenses that needs to be incurred on human resources management. Without effective human resource management an organization will not be able to find right kind of people to for doing the organizational work. The organization may on one hand be unable to get qualified people because it does not offer them the right kind for remuneration and working condition, and on the other hand pay too much money to to less suitable persons and assign them responsibilities and power much in excess of their capabilities. The capable people who do join the organization may not be able to work effectively because of many factors like inappropriate organization structure, organizational culture, lack of effective cooperative working in the organization, and inadequate motivation. Under such condition the best people may leave the organization, while others who cannot find alternative jobs continue. The cost losses incurred and opportunities missed by an organization by such ineffective management can be eliminated by spending only a fraction of such cost on effective human resource management. Thus human resource management is a great asset for any organization

Human resource Accounting is the process of identifying and reporting the Investments made in the Human Resources of an Organisation that are presently not accounted for in the conventional accounting practices. In simple terms, it is an extension of the Accounting Principles of matching the costs and revenues and of organising data to communicate relevant information in financial terms. The Quantification of the value of Human Resources helps the management to cope up with the changes in its quantum and quality so that equilibrium can be achieved in between the required resources and the provided human resources. Approaches to Human resource accounting was first developed 1691 the next stage was during 1691-1960 and third phase post-1960. There are two approaches to HRA. Under the cost approach, also called human resource cost accounting method or model, there is a) Acquisition cost model and b)replacement cost model. Under the value approach there are a) present value of future earnings method, b) discounted future wage model, c) competitive bidding model. Human Resource Accounting provides useful information to the management, financial analysts and employees as stated below:1. Human Resource Accounting helps the management in Employment and utilisation of Human Resources. 2. It helps in deciding transfers, promotion, training and retrenchment of human resources 3. It provides a basis for the planning of physical assets vis-a-vis human resources 4. It helps in evaluating the expenditure incurred for imparting further education and training of employees in terms of the benefits derived by the firm. 5. It helps to identify the causes of high labour turnover at various levels and taking preventive measures to contain it. 6. It helps in locating the real cause for low return on investment, like improper or under-utilisation of physical assets or human resources or both 7. It helps in understanding and assessing the inner strength of an organisation and helps the management to steer the company well through the most averse and unfavourable circumstances. 8. It provides valuable information for persons interested in making long term investments in the firm. 9. It helps the employees in improving their performance and bargaining power. It makes each employee understand his contribution towards the betterment of the firm vis-a-vis the expenditure incurred by the firm on him

Objectives
1. To furnish cost value information for making proper and effective management decisions about acquiring, allocating developing and maintaining human resources in order to achieve cost effective organisational objectives. 2. To monitor effectively the use of human resources by the management.

3. To have an analysis of the Human Asset, i.e. whether such assets are conserved, depleted or appreciated. 4. To aid in the development of management principles and proper decision making for the future by classifying financial consequences of various practices.

Customer Retention Customer Retention marketing is a tactically-driven approach based on customer behavior. It's the core activity going on behind the scenes in Relationship Marketing, Loyalty Marketing, Database Marketing, Permission Marketing, and so forth. Heres the basic philosophy of a retention-oriented marketer: 1. Past and Current customer behavior is the best predictor of Future customer behavior. Think about it. In general, it is more often true than not true, and when it comes to action-oriented activities like making purchases and visiting web sites, the concept really shines through. We are talking about actual behavior here, not implied behavior. Being a 35-year-old woman is not a behavior; its a demographic characteristic. Take these two groups of potential buyers who surf the Net: People who are a perfect demographic match for your site, but have never made a purchase online anywhere People who are outside the core demographics for your site, but have purchased repeatedly online at many different web sites If you sent a 20% off promotion to each group, asking them to visit and make a first purchase, response would be higher from the buyers (second bullet above) than the demographically targeted group (first bullet above). This effect has been demonstrated for years with many types of Direct Marketing. It works because actual behavior is better at predicting future behavior than demographic characteristics are. You can tell whether a customer is about to defect or not by watching their behavior; once you can predict defection, you have a shot at retaining the customer by taking action. 2. Active customers are happy (retained) customers; and they like to "win." They like to feel they are in control and smart about choices they make, and they like to feel good about their behavior. Marketers take advantage of this by offering promotions of various kinds to get consumers to engage in a behavior and feel good about doing it. These promotions range from discounts and sweepstakes to loyalty programs and higher concept approaches such as thank-you notes and birthday cards. Promotions encourage behavior. If you want your customers to do something, you have to do something for them, and if its something that makes them feel good (like they are winning the consumer game) then theyre more likely to do it. Retaining customers means keeping them active with you. If you don't, they will slip away and eventually no longer be customers. Promotions encourage this interaction of customers with your company, even if you are just sending out a newsletter or birthday card. The truth is, almost all customers will leave you eventually. The trick is to keep them active and happy as long as possible, and to make money doing it. 3. Retention Marketing is all about: Action Reaction Feedback Repeat. Marketing is a conversation, as the ClueTrain Manifesto and Permission Marketing have pointed out. Marketing with customer data is a highly evolved and valuable

conversation, but it has to be back and forth between the marketer and the customer, and you have to LISTEN to what the customer is saying to you. For example, let's say you look at some average customer behavior. You look at every customer who has made at least 2 purchases, and you calculate the number of days between the first and second purchases. This number is called "latency" - the number of days between two customer events. Perhaps you find it to be 30 days. Now, look at your One-Time buyers. If a customer has not made a second purchase by 30 days after the first purchase, the customer is not acting like an "average" multipurchase customer. The customer data is telling you something is wrong, and you should react to it with a promotion. This is an example of the data speaking for the customer; you have to learn how to listen. This site and the Drilling Down book are all about how to discover, manage, and listen to customer data. The data is speaking for the customer, telling you by its very existence (or non-existence) there has been an action (or non-action) waiting for a reaction. 4. Retention Marketing requires allocating marketing resources. You have to realize some marketing activities and customers will generate higher profits than others. You can keep your budget flat or shrink it while increasing sales and profits if you continuously allocate more of the budget to highly profitable activities and away from lower profit activities. This doesn't mean you should "get rid" of some customers or treat them poorly. It means when you have a choice, as you frequently do in marketing, instead of spending the same amount of money on every customer, you spend more on some and less on others. It takes money to make money. Unless you get a huge increase in your budget, where will the money come from? For example, let's say you have 1,000 customers, and you have an annual budget of $1,000. You spend $1 on each customer each year, and for that $1, you get back $1.10 in profits. That's an ROI of 10%; you got back $1,100 for spending $1,000.

Now, what if you knew spending $2 each year on a certain 50% of customers would bring back $8 in profits. That's a 400% ROI. Where do you get the extra $1? You take it away from the other 50% of customers. You spend the same $1,000 total and you make back 500 (half the customers) x $8 = $4,000. If you always migrate and reallocate marketing dollars towards higher ROI efforts, profits will grow even as the marketing budget stays flat. You have to develop a way to allocate resources to the most profitable promotions, deliver them to the right customer at the right time, and not waste time and money on unprofitable promotions and customers. This is accomplished by using the data customers create through their interactions with you to build simple models or rules to follow. These models are your listening system, like the "30 day latency" model above. They allow the data to speak to you about the customer. This site and the Drilling Down book are about teaching you how to build and use these

models yourself in 30 minutes with an Excel spreadsheet. If you want to increase sales while reducing the costs of marketing to customers, you have to get this book Customer retention Customer Retention is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organisation has with a customer and continues throughout the entire lifetime of a relationship. A companys ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace. Customer retention is more than giving the customer what they expect, its about exceeding their expectations so that they become loyal advocates for your brand. Creating customer loyalty puts customer value rather than maximizing profits and shareholder value at the center of business strategy.[1] The key differentiator in a competitive environment is more often than not the delivery of a consistently high standard of customer service. Customer retention has a direct impact on profitability. Research by John Fleming and Jim Asplund indicates that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers returns a revenue gain of 3.4 times the norm. How to Retain Customer Why is it Necessary. Customer retention is very important because acquiring a new customer is far more expensive than keeping an existing one. This is even more true if the market operating is saturated or saturating as in mobile telecommunication industry. Retention is important to most businesses because the cost of acquiring new customers is much greater than the cost of keeping good relationship with current customers. Note that management of customer attrition is very important part of customer lifecycle management - CLM The single most important thing in customer retention is to understand your customers well enough: customers' expectations, satisfaction, demographic & geographic & psychographic customer tendencies, etc. If you understand more about customers and know more about which customer groups are defecting to rival providers, more effective retention strategies can be developed. This is the key to the successful retention marketing!.

Customer Retention Customer retention is about keeping the customers youve already acquired. If youre in an

industry where customers make multiple purchases over the years, you should be very focused on retaining those customers by: Delivering service thats consistent with your value proposition and brand Cross-selling, up-selling and obtaining referrals from existing customers Developing programs to increase customer loyalty and decrease turnover Understanding the lifetime value for different segments and using that information to improve your marketing Prioritizing retention as a major focus in your annual marketing plan Customer retention strategies will vary depending upon your industry. They can be as simple as providing excellent customer service, or as complex as delivering the same integrated campaigns that you deliver to the rest of the market. Customer Retention Value How much have you invested in sales and marketing over the last few years? Thousands? Tens of thousands? Millions? Tens of millions? Studies show that it costs ten times more to generate a new customer than to maintain an existing one. If you have a small number of customers, losing a few could cripple your company. Even if you have a large number of customers, a small increase in your retention rate should dramatically increase profits. In fact, in the book, The Loyalty Effect, Fred Reichheld writes that a 5% improvement in customer retention rates will yield between a 25% to 100% increase in profits across a wide range of industries. With Growth Panel, you can measure customer loyalty, design campaigns for existing customers, and improve your customer service. Small improvements can yield noticeable results for your bottom line. Large improvements could deliver an exponential return. Customer Retention Tools in Growth Panel Develop a Service Strategy: Develop the strategy and determine the resources needed to effectively manage and maintain customers. Measure Customer Loyalty: Define the data youll need, how to use it, and how to obtain it. Project customer loyalty. Create an Account Management Team: Define job requirements, and hire and train account managers. Create Campaigns for Existing Customers: Outline different campaigns for existing customers to reach retention goals. Improve Customer Service: Improve live customer service and account management, and add other service tools, like self service websites.