chapter 4 class

8/9/2019 Chapter 4 Class

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Creating Customer Value and CustomerRelationships


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Chapter Questions

What are customer value, satisfaction, and

loyalty, and how can companies deliver them?

What is the lifetime value of customers and

how can marketers maximize it? How can companies attract and retain

customers and cultivate strong customer

relationships? What are the pros and cons of database

marketing?


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Eureka Forbes !"ift of a #mile$


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Customer-Orientations


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Customer Perceived Value

Customer perceived value is the difference

between the prospective customers

evaluation of all the benefits and all the costs

of an offering and the perceived alternatives%


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Determinants of

Customer Perceived Value

&mage benefit 'sychological cost

'ersonal benefit Energy cost

#ervices benefit (ime cost

'roduct benefit )onetary cost

(otal customer benefit (otal customer cost


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Applying Value Concepts

* firm can improve its offers in three ways+

% -y improving the economic, functional,

and psychological benefits of its product,

services, people, and.or image%

/% -y reducing the buyers nonmonetary

costs by lesser time, energy, and

psychological investment%

0% -y reducing the products monetary cost

to the buyer%


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Steps in a

Customer Value Analysis

&dentify ma1or attributes and benefits that

customers value

*ssess the 2ualitative importance of different

attributes and benefits *ssess the companys and competitors

performances on the different customer values

against rated importance

Examine ratings of specific segments

)onitor customer values over time


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What s !oyalty"

!oyaltyis a deeply held commitment to re3

buy or re3patronize a preferred product or

service in the future despite situational

influences and marketing efforts having thepotential to cause switching behavior%


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Delivering Superior Value

Customer Value #anagement $CV#%by (ata

#teel through a cross3functional 1oint team of

the company and the customer has succeeded

in delivering superior customer value


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#easuring Satisfaction

'eriodic surveys

4ustomer loss rate

)ystery shoppers

)onitor competitive performance


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#anaging Customers

5ealing with negative experiences and recoveringcustomer goodwill+

% #et up a 63day, /73hour toll3free hotline to

receive and act on customer complaints%

/% 4ontact the complaining customer as 2uickly aspossible to avoid negative word of mouth%

0% *ccept responsibility for the customers

disappointment8 dont blame the customer%7% 9se customer service people who are empathic%

:% ;esolve the complaint swiftly and to the

customers satisfaction%


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What is Quality"

Qualityis the totality of features and

characteristics of a product orservice that bear on its

ability to satisfy

stated or implied needs%


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#a&imi'ing Customer !ifetime Value

4ustomer 'rofitability

4ustomer E2uity


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Customer-Product Profita(ility

Analysis


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)stimating !ifetime Value

*nnual customer revenue+;s%:>>

*verage number of loyal years+ />

4ompany profit margin+ > 4ustomer lifetime value+ ;s>>>


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What s

Customer Relationship #anagement"

CR#is the process of carefully managing

detailed information about individual

customers and all customer touch points to

maximize customer loyalty%


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*rame+or, for CR# (y Don

Peppers and #artha Rogers

&dentify prospects and customers

5ifferentiate customers by needs and

value to company

&nteract to improve knowledge

4ustomize for each customer


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Customer Revie+s and

Recommendations

(he strongest influence on consumer choiceremains !recommended by relative.friend$%

With increasing mistrust of some companies

and their advertising, online customer ratingsand reviews and recommendations from

consumers are playing an important role%

-loggers who review products or services,

online retailers who add their own

recommendations have also become important%


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Attracting and

Retaining Customers

;educe the rate of defection

&ncrease longevity

Enhance share of wallet

(erminate low3profit customers

Focus more effort on high3profit customers


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he #ar,eting *unnel


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!oyalty Programs

4opyright @ />0 5orling Aindersley B&ndiaC 'vt


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Data(ase .ey Concepts

4ustomer database

5atabase marketing

)ailing list

-usiness database

5ata warehouse

5ata mining


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/sing the Data(ase

(o identify prospects

(o target offers

(o deepen loyalty

(o reactivate customers

(o avoid mistakes


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Don0t 1uild a Data(ase When

(he product is a once3in3a3lifetime purchase

4ustomers do not show loyalty

(he unit sale is very small

(he cost of gathering information is too high


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*or Revie+

What are customer value, satisfaction, and

loyalty, and how can companies deliver them?

What is the lifetime value of customers and

how can marketers maximize it? How can companies attract and retain

customers and cultivate strong customer

relationships?

What are the pros and cons of database

marketing?

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