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Building Customer Relationships

Building strong customer relationships is key to marketing success. It involves understanding customer needs, creating a customer-focused strategy, and delivering superior value and satisfaction through marketing programs. The goal is to move beyond satisfaction to customer delight in order to increase loyalty, retention, and lifetime value. To do this, companies must select the right customers to focus on, develop direct long-term relationships, and partner with other organizations to better meet customer needs. This will help companies capture more value from each customer in terms of increased purchases, share of wallet, and equity over their lifetime as a customer. Different customers require different relationship strategies depending on their potential profitability and loyalty.

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vikikull
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2K views

Building Customer Relationships

Building strong customer relationships is key to marketing success. It involves understanding customer needs, creating a customer-focused strategy, and delivering superior value and satisfaction through marketing programs. The goal is to move beyond satisfaction to customer delight in order to increase loyalty, retention, and lifetime value. To do this, companies must select the right customers to focus on, develop direct long-term relationships, and partner with other organizations to better meet customer needs. This will help companies capture more value from each customer in terms of increased purchases, share of wallet, and equity over their lifetime as a customer. Different customers require different relationship strategies depending on their potential profitability and loyalty.

Uploaded by

vikikull
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
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Building Customer Relationships

Building Customer Relationships

• The first three steps in the marketing process:

• understanding the marketplace and customer needs,

• designing a customer driven marketing strategy

• constructing marketing programs

• all leads up to the fourth and most important step: building profitable customer
relationships.
Customer relationship management

• The most important concept of modern marketing. Until recently, CRM has been
defined narrowly as a customer data management activity.

• In broader sense, customer relationship management is the overall process of


building and maintaining profitable customer relationships by delivering superior
customer value and satisfaction.
Customer perceived value

• The customer′s evaluation of the difference between all benefits and all the costs of a market
offering relative to those competing offers.

• Customers often do not judge product values and costs accurately or objectively. They act on
perceived value.
Customer Satisfaction

• Customer satisfaction depends on product′s perceived performance relative to a buyer′s


expectations. If the product′s performance falls short of expectations, the customer is dissatisfied. If
performance matches expectations, the customer is satisfied. If performance exceeds expectations, the
customer is highly satisfied.

• Most studies show that higher levels of customer satisfaction lead to greater customer loyalty,
which in turn in better company performance.

• Smart companies aim to delight customers by promising only what they can deliver, then
delivering more than they promise.
The changing nature of customer relationships
• Relating with more carefully selected customers: Many companies now use customer
profitability analysis to weed out losing customers and to target winning ones for pampering.
Once they identify profitable customers, firms can create attractive offers and special handling
to capture customers and earn their loyalty. But what should the company do with
unprofitable customers ? (turn them into profitable ones or fire them)

• Relating for long term: It can cost 5 to 10 times as much to attract a new customer as it does to
keep an existing one.

• Relating directly: Some marketers have hailed direct marketing as the “marketing model of
the next century.” They envision a day when all buying and selling will involve direct
connections between companies and their customers.
Partner relationship management

• When it comes creating customer value and building strong customer


relationships, today′s marketers know that they can′t go alone. They must work
closely with a variety of marketing partners.

• Partners inside the company: Marketing is far too important to be left only to the
marketing department.

• Marketing partners outside the firm: Changes are also occuring in hoe marketers
connect with suppliers, channel partners and even competitors. (networked
companies).
Capturing value from customers

• Creating customer loyalty and retention: The aim of customer relationship


management is to create not just customer satisfaction, but customer delight.

• Customer lifetime value: the value of the entire of purchases that the customer
would make over a lifetime of patronage. (Companies are realizing that losing a
customer means losing more than a single sale.)

• Growing share of customer: The portion of the customer′s purchasing that a


company gets in its product categories. (banks want to encrease “share of wallet”)

• Building customer equity: the total combined customer lifetime values of all of
the company′s customers. (It may be a better measure of firm′s performance than
current sales or market share) ......
Capturing value from customers

• Building the right relationship with right customers.

Projected loyalty

Short-term customers Long-term customers

Buterflies True friends

High Good fit between company′s offerings Good fit between company′s offerings and
profitability and customer′s needs - high profit customer′s needs - high profit potential
potential
Potential
profitability Strangers Barnacles

Low Little fit between company′s offerings Limited fit between company′s offerings and
profitability and customer′s needs - low profit customer′s needs - high profit potential
potential

• The different types of customers require different relationship management


strategies.
Seminárna práca:

Popíšte hodnotu ktorú vam poskytuje vybraný produkt a spôsob jej


prezentácie.

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