connecting with customer

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CREATING CUSTOMER VALUE ,

SATISFACTIONAND LOYALTY

MARKETING MANAGMENT

CHAPTER 5


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TYPES OF ORGANISTIONS

PROFIT CENTERED ORGANISATION

CUSTOMER CENTERED ORGANIZATION

Top

manage-

ment

Middlemanagement

Frontline people

CUSTOMERS

CUSTOMERS

Frontline people

Middle

management

Top

Manage-

ment


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BENEFITS OF CUSTOMER CENTERED

ORGANIZATION

CUSTOMER ADVOCACY STRATEGY.

COMPETITIVE ADVANTAGE.

CUSTOMER FEEDBACK.

when comp USA permitted on its site for online searchesit found that 20,000 more customer visited the site in a

month with a 50% greater propensity to buy.


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FACTORS AFFECTING CUSTOMER CHOICE

CUSTOMER PERCEIVED VALUE-

Difference between the prospective customers evaluation of all the benefits

and all the cost of an offering and the perceived alternatives.

TOTAL CUSTOMER BENEFIT-

Perceived monetary value of the bundle of economic , functional and

psychological benefits customer expect from a given market offering

because of the products, services , personnel and image involved


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FACTORS AFFECTING CUSTOMER CHOICE

TOTAL CUSTOMER COST-

perceived bundle of costs customer expects to incur in evaluating,obtaing, using

and disposing of the given market offering including monetary, time ,energy , and

psychological costs.

CUSTOMER PERCEIVED VALUE IS BASED ON THE

DIFFERENCE BETWEEN WHAT THE CUSTOMER GETS

AND WHAT HE/SHE GIVES FOR DIFFERENT POSSIBLECHOICES


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DETERMINANTS OF CUSTOMER-PERCEIVED VALUE

Customer-

Perceivedvalue

Total

Customer

benefit

Total

Customer

cost

Product

benefitMonetary

cost

Services

benefit

Time

cost

Personnel

benefit

Energy

cost

Imagebenefit

Psychologicalcost


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BENEFITS OF CUSTOMER VALUE ANALYSIS

Identify the major attributes and benefits that customer value.

Assess the quantitative importance of different attributes and benefits.

Assess the company s and competitors performances on different

customer values against their rated importance.

Examine how customers in specific segment rate the companys

performance against a specific major competitor on an individual

attribute basis.

Monitor customer value over time.


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REASONS FOR WRONG CHOICE BY CUSTOMER

Customer Ignorance.

Short Term Goal( profit maximization).

Budget Related Issues.

Effect of Competitors.


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CUSTOMER LOYALTY-DELIVERY OF HIGH

CUSTOMER VALUE

A DEEPLY HELD COMMITMENT TO

REBUY OR A PREFERRED PRODUCT OR

SERVICE IN THE FUTURE DESPITE

SITUTIONAL INFLUENCESANDMARKETING EFFORTS HAVING

POTENTIAL TO CAUSE SWITCHING

BEHAVIOUR- OLIVER


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TECHNIQUES USED FOR MAXIMIZING CUSTOMER

LOYALITY

The value proposition consists of the whole

cluster of benefits the company promises to

deliver.

It is more then core positioning of the

offering.



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LOYALITY

The value delivery system includes all the

experiencing the customer will have on the

way to obtaining and using the offering which

help to deliver distinctive consumer value.

Volvos core positioning has been safety but

it also includes long lasting car and goodservices.


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CUSTOMER SATISFACTION AND EXPECTATIONS

Customer satisfaction is the persons feelings

of pleasure or disappointment that result

from comparing a products performance to

their expectations.

Depends on many factors viz price ,loyality

relationship , accessibility and availability of

product and others.


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CUSTOMER SATISFACTION AND EXPECTATIONS

Customer satisfaction is derived when itfulfills customers expectations.

Expectations result from past buying

experience,advices and marketers andcompetitors information and promises

Korean automaker kia found success in us

by launching low cost,high quality cars withenough reliability so that it could offer 10 yearwarranties


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MEASUREMENT TECHNIQUES OF CUSTOMER

SATISFACTION

There are different methods of measuring

customer satisfaction

Periodic surveys-

Track customer satisfaction directly.

Through questionnaire.

To clarify about repurchase intention andrespondents willingness to recommend to

others .


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MEASUREMENT TECHNIQUES OF CUSTOMER

SATISFACTION

Customer loss rate technique-

Measure customers those who are switching

to other brands suupliers or either stopped

buying.

Mystery shoppers technique-

Act as potential buyers and report on strong

and weak points experinced in buying the

product


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FACTORS INFLUENCING CUSTOMER

SATISFACTION

Customer complaints-

A sense of cutomer satisfaction by tallying

complaints.

Studies shows that customers are

dissatisfied with their purchases about 25%

of the time but only 5% complains.

95% feel complaining is not worth the effort


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WAYS TO TACKLE CONSUMER COMPLAINTS

Set up 7-day,24-hourtoll-free hotline (byphone ,fax,email)to receive and act oncustomer complaints

Contact the complaining customer as soonas possible

Accept responsibility of dissatisfaction

Use people who are empathicResolve customer complains swiftly and to

customer satisfaction


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IMPACT OF PRODUCT AND SERVICE QUALITY

QUALITY IS TOTALITY OF FEATURES ANDCHARACTERISTICS OF A PRODUCT ORSERVICE THAT BEAR ON ITS ABILITY TOSATISFY STATED NEEDS.

-AMERICAN SOCIETY FOR QUALITYCONTROL

Northwest Airlines came to last of all top airlinesin BOYH ACS INDEX AND JD POWER AND

ASSOCIATES CUSTOMER SATISFACTIONPOLL due to its service quality.

QUALITY is the key to value creation andcustomer satisfaction.


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DUTIES UNDER QUALITY MANAGEMNT

Recognizing correctly customer needs andrequirement.

Communicate customer expectations to product

designers Timely disposal of customers order.

Check all the instructions and technicalassistance are provided to customers.

Check level of after sales service satisfaction.

Ask for customer feedback.


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CUSTOMER LIFETIME VALUE (CLV)

It consists of profitable consumer which is a

person household or company that over time

yields a revenue stream that exceeds the

acceptable amount which is spend bycompany for attracting , selling and servicing

that customer


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CUSTOMER PROFITABILITY ANALYSIS

Activity based costing.

Revenue from customers.

Including cost of all the resources thatultimately , serves customers.

Considers customers portfolio.


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DIAGRAM

C1 C2 C3

P1 + + + High Profitable

Prodcut

P2 + Profitable

ProductP3 ---- ---- Unprofitable

Prodcut

P4 ---- Highly

Unprofitable

ProductHigh Profit

Customer

Mixed bag

Customer

Losing

Customer


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CUSTOMER RELATIONSHIP MANAGEMENT

Process of carefully managing detailedinformation about individual customers andall customers touch point(it is any

occasions on which customers encounters abrand and product) to maximize custom andloyalty.

Enables companies to provide excellent raretype customers service through effective useof individual account information.

Forms a major driver of companies

profitability.


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ONE-TO-ONE MARKETING

Under CRM it is mainly used in rural sectorsand the features are listed below :-

Identify your prospects and customers.

Differentiate customers in terms of their needsand their value to your company.

Interact with individual customers to improveyour knowledge about their individual needs and

to build stronger relationships. Customize products , service and messages to

each customers.


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ATTRACTING AND RETAINING CUSTOMERS

Reducing the rate of customers defection:-

Increasing the longevity of the customerrelationship .

Enhancing the growth potential of eachcustomers through shares of wallet(gift andaccessories given free).

Making low profit customers more profitableor terminating them .


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RETENTION DYNAMICS

Potentials

Prospects

First-time

customers

Repeat

customers

Clients

Members

Advocates

Partners

Disqualified

prospects

Inactive or

Ex-customers


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BUILDING LOYALTY

Interacting with customers in CRM the companyused on going mechanism that gives managersplugged in to frontline customers feedback.

Developing loyalty programs :- Frequency programs:- Design to provide

rewards to customers who buy frequently and insubstantial amount.

Club membership program :- these clubs areresponsible for those customers who are thelargest portion of business.


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CUSTOMER DATABASE AND DATABASE

MARKETING

Customer database is the organize collection of

comprehensive information of individual

customers or prospects that is current

accessible and actionable for search marketingpurposes.

Database marketing is the process of building ,

maintaining and using customer data base andother database (products, suppliers etc.) to

contact , transact and building customer

relationships.


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DATAWARE HOUSE AND DATA MINING

These data are collected by the companys contactcentre and organized into a data ware house wheremarketers can capture , query and analyze it to drawinferences about an individual customers needs and

responses . By Data mining marketing statisticians can extract

useful information about an individual , trends andsegments from the mass of data . It uses

sophisticated statistical and mathematical techniquessuch as cluster analysis , automatic interactiondetection , predictive modeling and neural networking.


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USES OF DATABASE

To identify prospects

To decide which customers should receive a

particular offer

To deepen customer loyalty

To reactivate customer purchases

To avoid serious customer mistakes


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BY:-

Amir Suhail

Amit Singh

Amrit Singh

Amulya SharmaAnkit Kumar Singh

Ankit Verma

Ankit Yadav

Akash Agnihotri


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