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Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
Building Customer  Satisfaction, Value,  and Retention
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Building Customer Satisfaction, Value, and Retention

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Building Customer …

Building Customer
Satisfaction, Value,
and Retention

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  • 1. Chapter 3 Building Customer Satisfaction, Value, and Retention PowerPoint by Karen E. James Louisiana State University - Shreveport
  • 2. Objectives <ul><li>Understand how companies deliver customer value and satisfaction. </li></ul><ul><li>Identify the factors that make a high performance business. </li></ul><ul><li>Understand how companies attract and retain customers. </li></ul>
  • 3. Objectives <ul><li>Realize how companies can improve both customer and company profitability. </li></ul><ul><li>Understand how companies can deliver total quality. </li></ul>
  • 4. Customer Value <ul><li>Customers seek to maximize value by </li></ul><ul><ul><li>estimating which offer (product/firm) delivers the most value (CPV) </li></ul></ul><ul><ul><li>forming an expectation of value and acting upon it (purchase) </li></ul></ul><ul><ul><li>evaluating their usage experience against the expectations </li></ul></ul><ul><li>Satisfaction results when expectations are equaled or surpassed </li></ul>
  • 5. Customer Perceived Value <ul><li>Perception of delivered value is a function of: </li></ul><ul><ul><li>Total customer costs </li></ul></ul><ul><ul><li>Total customer value </li></ul></ul><ul><li>Firms at a disadvantage must: </li></ul><ul><ul><li>Reduce perceptions of costs or enhance perceptions of value </li></ul></ul>
  • 6. Customer Satisfaction <ul><li>Satisfaction is defined as . . . </li></ul><ul><ul><li>“a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.” </li></ul></ul>
  • 7. Customer Satisfaction <ul><li>To maximize satisfaction . . . </li></ul><ul><ul><li>Don’t exaggerate the product / service’s capabilities in advertising or other communications </li></ul></ul><ul><ul><ul><li>Dissatisfaction will result </li></ul></ul></ul><ul><ul><ul><li>FTC may become involved </li></ul></ul></ul><ul><ul><li>Don’t set expectations too low </li></ul></ul><ul><ul><ul><li>Market size will be limited </li></ul></ul></ul>
  • 8. High Performance Businesses <ul><li>Keys to Success </li></ul><ul><li>Stakeholders </li></ul><ul><li>Processes </li></ul><ul><li>Resources </li></ul><ul><li>Organization </li></ul><ul><li>Identify several stakeholder groups for your University </li></ul><ul><li>How might the needs of these groups conflict with each other? </li></ul>
  • 9. High Performance Businesses <ul><li>Keys to Success </li></ul><ul><li>Stakeholders </li></ul><ul><li>Processes </li></ul><ul><li>Resources </li></ul><ul><li>Organization </li></ul><ul><li>New product development </li></ul><ul><li>Customer attraction and retention </li></ul><ul><li>Order fulfillment </li></ul><ul><li>Reengineering work flows </li></ul><ul><li>Building cross functional teams </li></ul>
  • 10. High Performance Businesses <ul><li>Keys to Success </li></ul><ul><li>Stakeholders </li></ul><ul><li>Processes </li></ul><ul><li>Resources </li></ul><ul><li>Organization </li></ul><ul><li>Resources include labor, materials, machines, energy, and information </li></ul><ul><li>Outsourcing vs. ownership: Own and nurture core competencies </li></ul>
  • 11. High Performance Businesses <ul><li>Keys to Success </li></ul><ul><li>Stakeholders </li></ul><ul><li>Processes </li></ul><ul><li>Resources </li></ul><ul><li>Organization </li></ul><ul><li>Organization refers to the organization’s policies, structures, and corporate culture </li></ul><ul><li>Corporate culture: shared experiences, stories, beliefs, and norms within an organization </li></ul>
  • 12. Core Business Practices <ul><li>Market Sensing </li></ul><ul><li>Customer Acquisition </li></ul><ul><li>Customer Relationship Management </li></ul><ul><li>Fulfillment Management </li></ul><ul><li>New Offering Realization </li></ul>
  • 13. Customer Retention <ul><li>Reducing customer churn (defection) is highly desirable </li></ul><ul><ul><li>Define and measure retention rate </li></ul></ul><ul><ul><li>Identify causes of attrition </li></ul></ul><ul><ul><li>Estimate profit lost from customer defection (customer lifetime value) </li></ul></ul><ul><ul><li>Estimate cost to reduce defection; take appropriate action </li></ul></ul>
  • 14. Drivers of Customer Equity <ul><li>Brand Equity </li></ul><ul><li>Relationship Equity </li></ul><ul><li>Value Equity </li></ul>
  • 15. Strong Customer Bonds <ul><li>Keys to Success </li></ul><ul><li>Adding Financial Benefits </li></ul><ul><li>Adding Social Benefits </li></ul><ul><li>Adding Structural Ties </li></ul><ul><li>Frequency programs </li></ul><ul><li>Club memberships </li></ul>
  • 16. Strong Customer Bonds <ul><li>Keys to Success </li></ul><ul><li>Adding Financial Benefits </li></ul><ul><li>Adding Social Benefits </li></ul><ul><li>Adding Structural Ties </li></ul><ul><li>Personalize customer relationships </li></ul>
  • 17. Strong Customer Bonds <ul><li>Keys to Success </li></ul><ul><li>Adding Financial Benefits </li></ul><ul><li>Adding Social Benefits </li></ul><ul><li>Adding Structural Tie </li></ul><ul><li>Create long-term contracts </li></ul><ul><li>Charge less for ongoing purchases </li></ul><ul><li>Link product to long-term service </li></ul>
  • 18. 20 – 80 – 30 Rule <ul><li>20% of your customers </li></ul>Half of your profit is lost serving the bottom 30% of your customer base Generate 80% of your profit 30 80 20

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