creating customer value, satisfaction & loyalty
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Top 10 Concepts
Ch 5 and Creating Customer Value,
Satisfaction & Loyalty
Joan Soliven
April 8, 2011
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Outline
1. Customer Perceived Value
2. Customer Satisfaction
3. Quality
4. Maximize Customer Lifetime Value
5. Customer Relationship Management
6. Increase Value of Customer
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Outline
7. Customer Development Process
8. Customer Retention
9. Customer Loyalty
10. Database
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Customer Perceived Value
Difference between what the customer gets and what he or she gives for different possible choices.
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Consumers are more educated and
informed, they seek out superior
alternatives
Dell offering better service than HP, they beginning to outpace Dell in terms of customer perceived value
Successful Companies follow the
Modern Customer-oriented Org. Chart
Customers
Front-line people
Middle Management
Top Management
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Everyone in the company has their own
role that aims to satisfy the customer
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meet serve and satisfycustomers
support the frontlinepeople
Hire and support good middleManagers
What do customer perceived
as valuable?
Image
Personnel
Services
Products
Total Customer Benefit
Psychological
Energy
Time
Monetary
Total Customer Cost
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5 steps to determine
Customer Value
Identify major attributes and benefits that customer value
Assess the importance of different attributes and benefits
Assess the company’s and competitor’s performance
Examine ratings of specific segments
Monitor customer values over time
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Companies that are Good in
Delivering Customer Value
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2. Customer Satisfaction
The feeling of satisfaction or dissatisfaction of the customer from a product’s outcome versus customer’s expectation.
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Measurement for
Customer Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive Performance
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Measurement for
Customer Satisfaction
Periodic Surveys Customer LossRate
MysteryShopper
MonitorCompetitive
Performance
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-Track customersatisfaction -To find out why
they stop buying
- experiencecompany’s& competitor’sProducts & service
- find out the customerSatisfaction rate of Competitors.
3. Customer Satisfaction
depends on Quality
Quality is the totality of features and characteristics of a product or service that bear of its ability to satisfy needs.
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Impact of Quality
Product and Service Quality
Customer Satisfaction
Company Profitability
These 3 are interrelated with each other
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4. Maximize Customer
Lifetime Value
CustomerProfitability
CustomerEquity
Lifetime Value
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Customer Profitability in relation
to 80-20 or 150-20 Rule
20% of the customer often generates 80% or more of the company’s profits.
20% most profitable customers generate as much as 150% of the profits of a company; the 20% least profitable lose 100% of the profits.
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5. Customer Relationship Management
The process of carefully managing detailed information about individual customers and all customer ”touch points” to maximize customer loyalty.
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Excellent Real-time Customer Service
through the effective use of information
Market offerings
Services
Programs
Messages
Media
Maximize Costumer Loyalty through
Customer Relationship Mgmt by:
Identifying your prospects and customers
Differentiating customers by their needs and their value to company
Interacting with customers
Customizing for each customer.
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6. Increasing Value of
Customer Base by:
Reduce the rate of defection
Increase longevity of relationship
Enhance ”share of wallet”
Terminate low-profit customers
Focus more effort on high profit customers
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How does Customer Value Works?
Reduce the rate of defection =
Increase longevity of relationship =
Enhance ”share of wallet” =
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Knowledgeable employeesto answer customersatisfactorily
Treat customers as partners
Increase sales by providing new offerings An opportunities.
7.Customer Development Process
Potentials
Prospects
First-time customers
Repeat Customers
Clients
Members
Advocates
Partners
Inactive or Ex-customers
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Behavior of Customer in the
Customer-Development Process
Potentials – interested
Prospects – motivated
First-time & repeat customers – needs to be encourage through marketing efforts
Potentials
Prospects
First-time customers
Repeat Customers
Clients
Members
Advocates
Partners
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Clients - needs to be treated special
Members – enjoying the benefits
Advocates – recommending the product
Partners
Potentials
Prospects
First-time customers
Repeat Customers
Clients
Members
Advocates
Partners
Behavior of Customer in the
Customer-Development Process
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8. Maintaining Customer is better
than Acquiring Customer
Acquiring customers can cost more than retaining them.
The average customer loses of its customer each year.
A reduction to the customer defection rate can increase profits by to .
The customer profit rate increases over the life of a retained customer.
5X
10%
5%25% 75%
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10. Five Ways in Using Database
To identify prospects
To target offers
To deepen loyalty
To reactive customers
To avoid mistakes
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Summary
The company should meet the customer perceived value in order to satisfy the total customer benefits and total customer cost.
The company should constantly evaluate if the costumer needs & wants are met
High satisfaction leads to high customer loyalty.
Maintaining customer is easier than acquiring new costumer.
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Conclusion
The heart of satisfying and maintaining customer is to meet their expectations on the product/services and create good relationship thus creates customer loyalty.
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Thank you!
Ch 5 and Creating Customer Value,
Satisfaction & Loyalty
Joan Soliven
April 8, 2011
http://joansoliven.blogspot.com/
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