Marketing Management

Creating Customer Value, Satisfaction, and Loyalty

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Organizational Charts

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

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 the perceived alternatives.

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Determinants of Customer Perceived Value

Total Customer Benefit Total Customer Cost

Product benefit

Monetary cost

Services benefit

Time cost

Personnel benefit

Energy cost

Image benefit

Psychological cost

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

What is Loyalty?

R. L. Oliver Loyalty Researcher (1991)

Loyalty is a deeply held commitment to re-buy or repatronize a preferred good or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Dick and Basu Loyalty Model (1994)

Repeat Purchase High High Low

Relative Attitude

True Loyalty Spurious Loyalty

Latent Loyalty No Loyalty

Low

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

The Value Proposition

The whole cluster of benefits the company promises to deliver

Unique Value Proposition

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

The Value Proposition

The whole cluster of benefits the company promises to deliver

Unique Value Proposition

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Customer Satisfaction

More Than Expected Perceived Benefits Received Expected Less Than Expected Equal to Expected

STANDARD DISSATISFIED SATISFIED CUSTOMER CUSTOMER

DELIGHTED CUSTOMER

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Measuring Satisfaction
Periodic Surveys Customer Loss Rate

Mystery Shoppers Monitor Competitive Performance

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

What is Customer Relationship Management?

A comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer. Atul Parvatiyar and Jagdish Sheth (2001)

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Framework for CRM Identify prospects and customers Differentiate customers by needs and value to company Interact to improve knowledge Customize for each customer

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

CRM Strategies
Reduce the rate of defection Increase longevity Enhance share of wallet Terminate low-profit customers Focus more effort on high-profit customers
Value, Satisfaction, & Loyalty DR. KALLOL DAS

Marketing Management

Customer Retention
Acquisition of customers can cost five times more than retaining current customers. The average business firm loses 50% of its customers each year. A 5% reduction to the customer defection rate can increase profits by 25% to 85%. The customer profit rate increases over the life of a retained customer.

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

The Customer Development Process

Suspects

Prospects First-time customers Repeat customers

Clients

Members

Ex-customers
Value, Satisfaction, & Loyalty

Partners

DR. KALLOL DAS

Marketing Management

Using the Database

To identify prospects To target offers To deepen loyalty To reactivate customers To avoid mistakes
Value, Satisfaction, & Loyalty DR. KALLOL DAS

Marketing Management

Prospecting
Statement to read out: Good morning, this is Anita from Excel Slimming Centre. Would you like me to tell you about our magical weight-reducing powder? Response: (a) Yes number? (b) No (c) Who gave you this

Statement to read out: Could you please let me know your weight? Response: (a) Upto 50 kg (b) 51 75 kg (c) 76 100 kg (d) 101 125 kg (e) Over 125 kg Statement to read out: How many people are there in your family? Response: (a) 1 (b) 2 (c) 3 4 (d) 5 6 (e) 7 or more Statement to read out: Could you please let me have your residential address? Our Sales Head would like to meet you.
Value, Satisfaction, & Loyalty DR. KALLOL DAS

Marketing Management

Dont Build a Database When

The product is a once-in-a-lifetime purchase You have very limited customers The cost of gathering information is too high

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Key Questions for Managers to Ask About Customer Complaining Behavior

Why do customers complain? What proportion of unhappy customers complain? Why dont unhappy customers complain? Who is most likely to complain? Is a complaining customer good for the company? How do we make it easy for customers to complain?

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Guidelines for Effective Complaint Resolution

Act fast Admit mistakes but dont be defensive Understand problem from customers viewpoint Dont argue Give benefit of doubt Keep customers informed of progress Consider compensation Persevere to regain goodwill

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

How Generous Should Compensation Be?

What is the firms brand positioning? How severe was the service failure? Who is the affected customer?

Value, Satisfaction, & Loyalty

DR. KALLOL DAS

Marketing Management

Perils of CRM Software Implementation

Implementing CRM Software before creating a customer strategy Rolling out CRM Software before changing the organization to match Assuming more CRM technology is better Pressurizing, not wooing, customers

Value, Satisfaction, & Loyalty

DR. KALLOL DAS