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4 Creating Customer Value and Customer Relationships

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28 views

4 Creating Customer Value and Customer Relationships

as

Uploaded by

Zara Ramis
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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1

4
Creating Customer
Value and Customer
Relationships

Figure 4.1 Customer-Orientations

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-2

What is
Customer Perceived Value?

Customer perceived value is the


difference between the prospective
customers evaluation of all the benefits
and all the costs of an offering and a
comparison with the perceived
alternatives.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-3

Figure 4.2 Determinants of


Customer Perceived Value
Total customer benefit

Total customer cost

Product benefit

Monetary cost

Services benefit

Time cost

Personal benefit

Energy cost

Image benefit

Psychological cost

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-4

Steps in a
Customer Value Analysis
1.

2.

3.

4.
5.

Identify major attributes and benefits that


customers value
Assess the qualitative importance of different
attributes and benefits
Assess the companys and competitors
performances on the different customer
values against rated importance
Examine ratings of specific segments
Monitor customer values over time

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-5

What is Loyalty?
Loyalty is a deeply held commitment to rebuy or re-patronize a preferred product or
service in the future despite situational
influences and marketing efforts having the
potential to cause switching behavior.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-6

Measuring Satisfaction

Periodic surveys
Customer loss rate
Mystery shoppers
Monitor competitive performance

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-7

What is Quality?
Quality is the totality of features and
characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.
Conformance quality
Performance quality

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-8

Customer Profitability

A profitable customer is a person, household


or company that over time yields a revenue
stream exceeding by an acceptable amount
the companys cost stream for attracting,
selling, and serving that customer.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-9

Figure 4.3 Customer-Product


Profitability Analysis

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-10

Maximizing Customer Lifetime Value

Customer lifetime value describes the net


present value of the stream of future profits
expected over the customers lifetime
purchases. And from it then expected costs of
attracting and selling that customer is
subtracted.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-11

What is
Customer Relationship Management?
CRM is the process of carefully managing
detailed information about individual
customers and all customer touch points to
maximize customer loyalty.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-12

Framework for CRM


1.

2.

3.
4.

Identify prospects and customers: Dont go


after everyone.
Differentiate customers by needs and value
to company (ABC costing, customer lifetime
value)
Interact to improve knowledge
Customize for each customer

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-13

Attracting and
Retaining Customers

Reduce the rate of defection


Increase longevity
Enhance share of wallet
Terminate low-profit customers
Focus more effort on high-profit customers

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-14

Reducing Defection
1.

2.

3.

Define and measure its retention rate


Distinguish the causes of customer exit and
identify the ones that can be managed
Compare the lost customers lifetime value to
the costs of reducing the defection rate.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-15

Figure 4.4 The Marketing Funnel

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-16

Loyalty Programs, Win-Backs

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

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Using the Database

To identify prospects
To target offers
To deepen loyalty
To reactivate customers
To avoid mistakes

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-18

Dont Build a Database When

The product is a once-in-a-lifetime purchase


Customers do not show loyalty
The unit sale is very small
The cost of gathering information is too high

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

5-19

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