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Creating Long-term Loyalty Relationships.ppt
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Creating Long-term Loyalty Relationships
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 2 of 34
Discussion Questions
1. What are customer value, satisfaction, and loyalty, and how can companies deliver them?
2. What is the lifetime value of customers, and how can marketers maximize it?
3. How can companies attract and retain the right customers and cultivate strong customer relationships?
4. What are the pros and cons of database marketing?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 34
Customer Value, Satisfaction, and Loyalty
Holistic Marketing• Inform• Engage• Energize
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 4 of 34
Traditional Organization vs. Customer-Oriented Organization
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 5 of 34
Customer Perceived Value
Total Customer Cost
Total Customer Benefit
Customer-perceived Value
Functional
Economic
Psychological
Evaluating
Obtaining
Using
Disposing
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 6 of 34
Customer- perceived
value
Total customer benefit
Total customer
cost
Product benefit
Monetary cost
Services benefit
Timecost
Personal benefit
Energy cost
Imagebenefit
Psychological
cost
Determinants of Customer Perceived Value
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 7 of 34
Value Concepts - Caterpillar
Worth to farmer:$20,000
Cost to produce: $14,000
Profit PriceCustomer 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
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 34
Choice Processes and Implications
Lowest purchase price wins.
Friends with salesperson
Define
d
“A deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.”
-- Oliver
Customer Loyalty
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 10 of 34
Value Proposition
Core positioning: • Safety
Volvo
Other benefits: • Good performance• Design• Environmentally friendly
Define
d
A person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance to (or outcome) to expectations.
Satisfaction
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 12 of 34
Customer Satisfaction
Expectations
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 13 of 34
Customer Expectations
Expectations
Previous purchasesFriends
adviceMarketers’ / competitors
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 14 of 34
Monitoring Satisfaction
Customer Complaints
Measurement Techniques
Influence of Customer Satisfaction
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 15 of 34
Measurement Techniques
Customer Loss Rate
Mystery Shopper
Surveys
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 16 of 34
Influence of Customer Satisfaction
Customer satisfaction
Speed of communication
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 17 of 34
Customer Complaints
25%Dissatisfied
5%Complain
95%Stop buying
54% - 70%Buy again if resolved
95%If resolved quickly
Tell 5 people
Tell 11people
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 18 of 34
Product and Service Quality
Performance Conformance
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 19 of 34
Maximizing Customer Lifetime Value
20% of Customers
80% of Profits
Customers
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 20 of 34
Customer Profitability
Customer Lifetime Value
Customer Profitability Analysis
Profitable
Unprofitable
Define
d
A person, household, or company that over time yields a revenue stream exceeding by an acceptable amount the company’s cost stream for attracting, selling, and serving that customer.
A Profitable Customer
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 22 of 34
Customer-Product Profitability Analysis
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Cultivating Customer Relationships
Customer Information
• Differentiate
• Customize
• Personalize
• Share
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 24 of 34
Customer Relationship Management (CRM)
Personalizing Marketing
Customer Empowerment
Customer Reviews & Recommendations
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 25 of 34
Personalizing Marketing
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 26 of 34
One-to-One MarketingDifferentiate customers
Interact with each customer
Customize
Identify prospects and customers
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 27 of 34
Customer Empowerment
Brand Evangelists
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 28 of 34
Customer Reviews/Recommendations
Customer ratings
Negative reviews
Create Buzz
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 29 of 34
Customer RetentionAcquiring 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%
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 30 of 34
Attracting and Retaining Customers
Reduce Defections1.Define and measure2.Determine causes3.Compare CLV to costs
Retention Dynamics
Manage customer base
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 31 of 34
The Marketing Funnel
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 32 of 34
Building Loyalty
Develop loyalty programs
Interact with customers
Create institutional ties
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 33 of 34
Databases & Database MarketingCustomer databases
• Name, address, telephone #• Purchase history• Demographics• Psychographics• Mediagraphics
Data Warehouses
Data mining
