Professional Documents
Culture Documents
Course Instructor
Mihai ichindelean
CHAPTER QUESTIONS
What are customer value, satisfaction, and loyalty, and how can
companies deliver them?
What is the lifetime value of customers, and how can the marketers
maximize it?
How can companies attract and retain the right customers and
cultivate strong customer relationships?
Product benefit
Monetary cost
Services benefit
Time cost
Personal benefit
Energy cost
Image benefit
Psychological cost
Delivering high customer value => value proposition (consists of the whole
cluster of benefits the company promises to deliver; thus being more than
the core positioning of the offerings)
E.g.Volvo http://www.youtube.com/watch?v=MAW1E0Zuex0
CUSTOMER LOYALTY
What is Loyalty?
is a deeply held commitment to re-buy or re-patronize a preferred
product or service in the future despite situational influences and
marketing efforts having the potential to cause switching behavior
Behavioral Loyalty
Attitudinal Loyalty
Determinants of Loyalty - Trust and Satisfaction
What is Trust? (Shared Values, Effective Communication and Opportunistic
Behavior)
CUSTOMER SATISFACTION
What is Customer Satisfaction?
A Persons Feeling of pleasure or disappointment that results from comparing a
products perceived performance (or outcome) to expectations.
How do customers form their expectation?
=> Learning process (direct learning past buying experiences and/or indirect
learning friends advice, marketers and competitors information).
Periodic Surveys
Customer Churn Rate
Mystery Shoppers
Monitor Competitive Performance
CUSTOMER COMPLAINS
Relationship Intensity
Relationship Length
Acquisition PhaseRetention Phase Re(winning) Phase
CLV
=
m = estimated profit margin (for a t period)
i = discount rate
n = estimated lifetime (before company ends up)
r = retention rate (1-r churn rate)
AC = acquisition cost
CRM Framework
Identify prospects and customers
Differentiate customers by needs and value for
the company
Interact to improve knowledge
Customize for each customer
CRM Strategies
Reduce the rate of defection
Increase Longevity
Enhance share of wallet
Terminate low-profit customers
Focus more effort on high-profit customers
CUSTOMER RETENTION
Customer Retention
LOYALTY PROGRAMS
Loyalty Programs
Thanks!