kotler krash connecting with customers
DESCRIPTION
Today companies face their toughest competition ever. Moving from a product and sales philosophy to a holistic marketing philosophy, however. given them a better chance to outperforming the competition. And the cornerstone of a well conceived marketing orientation is strong customer relationship. In this presentation, we discuss how companies can win customers expectations. We also discuss the use of database marketing for customer relationship managementTRANSCRIPT
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Connecting With Customers
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What Marketers See
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What Customers See
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Consumer Thinking
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Challenge
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Connecting with Customers by Creating Long-Term Loyalty Relationships
Solution
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• How can companies deliver customer value and satisfaction?
• What is the lifetime value of a customer, and why is it important to marketers?
• How can companies cultivate strong customer relationships?
• What is the role of database marketing in customer relationship management?
Connecting with Customers
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• How can companies deliver customer value and satisfaction?
• What is the lifetime value of a customer, and why is it important to marketers?
• How can companies cultivate strong customer relationships?
• What is the role of database marketing in customer relationship management?
Connecting with Customers
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Customer Value and Satisfaction
Shifting to a Holistic Marketing approach to deliver Customer Value and Satisfaction
Holistic marketing approach:• Inform • Engage • Energize
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Shifting to a holistic marketing approach to deliver customer value, satisfaction, and loyalty
Traditional Org vs Modern Customer-Oriented Org
Cust
omer
s
Cust
omer
s
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Delivering Customer Value
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Figur
e
5.2
Customer Perceived value
Total customer benefit
Total customer cost
Product benefit
Monetary cost
Services benefit
Timecost
Personal benefit
Energy cost
Imagebenefit
Psychologicalcost
Determinants of Customer Perceived Value
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Value Concepts
Worth to farmer:$20,000
Cost to produce: $14,000
Profit Price Customer Value
$6,000 $20,000 -0-
5,000 19,000 $1,000
4,000 18,000 2,000
3,000 17,000 3,000
2,000 16,000 4,000
1,000 15,000 5,000
-0- 14,000 6,000
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Value Proposition
Core positioning: • Safety
Other benefits: • Good performance• Design• Environmentally friendly
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Satisfaction
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Customer Satisfaction
Expectations
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Customer Expectations
Expectations
Previous purchasesFriends advice
Marketers’ / competitors
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Monitoring Satisfaction
Customer Complaints
Measurement Techniques
Influence of Customer Satisfaction
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Measurement Techniques
Customer Loss Rate
Mystery Shopper
Surveys
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Customer Complaints
25%Dissatisfied
5%Complain
95%Stop buying
54% - 70%Buy again if resolved
95%If resolved quickly
Tell 5 people
Tell 11people
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Product and Service Quality
Quality
ProfitabilitySatisfaction
Performance Conformance
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• How can companies deliver customer value and satisfaction
• What is the lifetime value of a customer, and why is it important to marketers?
• How can companies cultivate strong customer relationships?
• What is the role of database marketing in customer relationship management?
Connecting with Customers
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Maximizing Customer Lifetime Value
20% of Customers
80% of Profits
Customers
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Customer Lifetime Value Cycle
Actual Value
Pote
ntial
Val
ueLo
wH
igh
Low High
Onetime buyer
Valuable customer Most Valuable customer
Onetime buyer
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• How can companies deliver customer value, satisfaction, and loyalty?
• What is the lifetime value of a customer, and why is it important to marketers?
• How can companies cultivate strong customer relationships?
• What is the role of database marketing in customer relationship management?
Connecting with Customers
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Customer Retention
Acquiring new customers costs
5x morethan retaining current customers
The average company loses
10%Of its customers yearly
Reducing customer defections by 5% can increase profits from
25% to 85%
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Cultivating Customer Relationships
Customer Information
• Differentiate
• Customize
• Personalize
• Share
CRM
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Customer Relationship Management (CRM)
One-to-One Marketing
Customer Empowerment
Customer Reviews & Recommendations
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One-to-One Marketing
2. Differentiate customers
3. Interact with each customer
4. Customize
1. Identify prospects and customers
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Customer Empowerment
Brand Evangelists
Energizing customers
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Customer Reviews and Recommendations
• Online Ads• Offline Ads
Brand identification
• Friends • Family
Personal circle influence • Reviews
• Forums• Product
comparison
Online research
Purchase
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The Marketing Funnel
Prospects
Customer
Tryer
Supporter
Advocate
Partner
Jour
ney
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• How can companies deliver customer value, satisfaction, and loyalty?
• What is the lifetime value of a customer, and why is it important to marketers?
• How can companies cultivate strong customer relationships?
• What is the role of database marketing in customer relationship management?
Index
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Databases & Database Marketing
Customer databases• Name, address, telephone #• Purchase history• Demographics• Psychographics
Data Warehouses Data mining
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Evolution of Database marketingMetric Initial Optimized Retention automation
Win by • Volume • Content • Data
Key Metrics • List size• Send
Volume
• Open• Clicks
• Conversions• Engaged subscriber• Churn
ESP selection • Cost • Better Feature sets
• Cost• Integration• Segmentation• Automation
Segmentation • None • Available buy limited
• Advanced• Purchase history• Automation
Automation • None • None • Post Purchase triggers• Win back campaign• Cross promotions• Survey
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RFM(Customer value)
Recency Frequency Monetary Value
Last purchase Points
3 months back 5
6 months back 4
9 months back 3
12 months back 2
15 months back 1
How often Points
5 5
4 4
3 3
2 2
1 1
Order value Points
100$ 5
80$ 4
60$ 3
40$ 2
20$ 1
Customer who purchased a product worth 80$, 12 months back214 RFM value
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Thank you