Customer Satisfaction Loyalty Relationship

Ref : Christopher Lovelock

Model of Customer Loyalty

3 zones

The satisfaction – loyalty relation falls into 3 zones :

Defection Zone Affection Zone Indifference Zone

Zone of defection

Zone of defection occurs at lower satisfaction levels. Customers will switch unless switching costs are high or there are no viable alternatives. Extreme dissatisfaction can make customers terrorists who will provide abundant negative word of mouth publicity.

Zone of Indifference

This is for intermediate satisfaction levels.

Customers are willing to switch if a better alternative is found.

Zone of affection

Very high satisfaction levels Customers fiercely loyal Customers who praise the firm in

public and refer others to the firm and are most loyal are called as Apostles.

Integrated Marketing Communications Strategy

Integrated strategy

Website + on line marketing activities were divorced from other marketing activities.

This led to conflicting messages to consumer.

Consumer is confused – no clear idea about the firm’s positioning strategy and value proposition.

Ex : Reliance Retail

Newspaper brochure

Actual experience at store – unaware staff

Have you ever seen a new, exciting service promotion being touted at a firm’s website only to find when you visited the branch office that the counter staff are unaware of the promotion and could not sell.

With so many channels delivering messages to customers & prospects, the firms have to adopt Integrated Marketing Communications Strategy.

A firm’s various media should deliver the same messages.

Communications from different media and communication approaches – all become part of a single message about the services.

New positions – Marketing Communications

Main dimensions of service environments Ambient conditions – Music, scents,

colors Spatial layout Functionality Signs, symbols, artifacts'

Each dimension can influence customer responses.

Service tiering

In service industries, most explicit form of positioning strategy based on several price-based classes of service concept, each will have a distinctive level of service performance.

Eg. Airlines - Business Class, Economy Class.

Positioning distinguishes a brand from its competitors.

Jack Trout – Marketing Consultant

He has distilled the essence of positioning as

Company must establish a position in the minds of its targeted customers.

Position must give a single and consistent message.

Position must set a company apart from its competitors.

Company must focus on efforts – a company cannot be all things to all people.

PRICING TRIPOD

See FigurePricing Strategy

Costs Competition

Value

to Customer

Servicescape Service environments Relate to style and appearance of physical

surroundings and other experiences of customers at service delivery sites.

Once they are designed & built, service environments are not easy to change.

Physical environments shape feelings, emotions and reactions in customers and employees.

For Resort Hotels, servicescapes form a core part of value proposition.

THE VILLAGE CHOWKA