CANTO 2008

Maximizing Customer Value

Building Loyalty

Introduction

• Robert W. Fordon

• Xelex Technologies Inc.

• Maximizing customer value

building loyalty

• Successful businesses typically see 80 percent of their business come

from 20 percent of their customers

• The cost to attract new customers is significantly more than to maintain

your relationship with existing ones, your efforts toward building

customer loyalty will certainly pay off.

Training

Overview

Incentives

Product Awareness

Reliability

Flexibility

People / Technology

Know Your Customers

Employee Loyalty

Customer Service

Communication

Vocabulary

• Customer loyalty - the tendency of

a customer to choose one

business or product over another for

a particular need or preference.

• Value proposition - what the

customer gets for what the

customer pays.

Customer Value

• Accordingly, a customer can evaluate a

company's value-proposition on two

broad dimensions:−relative performance: what the customer

gets from the vendor relative to a competitor's offering;

−price: The total cost which consists of the payment the customer makes to acquire the product or service; plus the access cost

Customer Value

• Higher buying rates and lower

service costs make long-term

customers more valuable (Lifetime

Value).

Customer Value

• The lifetime value of a customer is a measure of

the value of the customer to your business. − It is the potential contribution of the customer to your

business over a period of time. − When you know the lifetime value of a customer, you

have a benchmark for how much you would or should be willing to invest to acquire a customer.

Customer Value

• The calculation of customer-lifetime value (LV)

must take three factors into account: − margin (the annual revenue that customers generate

minus the operating expenses a company incurs in serving them)

− retention rate (the percentage of customers expected to keep doing business with the company)

− discount rate (the current cost of capital). The resulting dollar figure can yield a variety of insights.

How to achieve Customer Loyalty

Training

Incentives

Product Awareness

Reliability

Flexibility

People / Technology

Know Your Customers

Employee Loyalty

Customer Service

Communication

Customer Relationship Management

• Customer relationship management has to do

with any methods, policies, and procedures

that are utilized by a company to provide:− A high level of customer care to existing

customers.−Orient new customers to the products and services

offered by the business. −Encourage general customer retention.−Tools for customer analysis and CSR rapid

response.

Customer Relationship Management

• Generally, competent customer relationship

management involves providing customer

assistance on a variety of levels:− Operational− Collaborative − Analytical

Check Points

• Do you have a mission statement?

• Talk with your CSRs−Do they know your mission statement?−Know your product/service offerings?−Employee loyalty?−What are the problems/issues?

• Internal• Customer

Check Points

• Call your customer service line.

• Can you accurately tell your

customer’s opinion of your

company?−Talk to your customers