Creating customer value, satisfaction & loyalty


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Top 10 concepts

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  • At the top are customers; next in importance are frontline people who meet, serve, and satisfy customers; under them are the middle managers, whose job is to support the frontline people so they can serve customers well; and at the base is the top management, whose job is to hire and support good middle managers.
  • The implication is that a company could improve its profitability by “firing” its worst customers
  • Creating customer value, satisfaction & loyalty

    1. 1. Top 10 Concepts Ch 5 and Creating Customer Value, Satisfaction & Loyalty <br />Joan Soliven<br />April 8, 2011<br /><br />
    2. 2. Outline<br />Customer Perceived Value<br /> Customer Satisfaction<br />Quality <br />Maximize Customer Lifetime Value<br />Customer Relationship Management<br />Increase Value of Customer<br /><br />
    3. 3. Outline <br />Customer Development Process <br />Customer Retention <br />Customer Loyalty<br />Database <br /><br />
    4. 4. 1. Customer Perceived Value <br />Difference between what a customer gets from a product, and what he or she has to give in order to get it.<br /><br />
    5. 5. Successful Companies follow the Modern Customer-oriented Org. Chart <br />CUSTOMERS<br />CUSTOMERS<br /><br />
    6. 6. What do customer perceived as valuable?<br /><br />
    7. 7. 5 steps to determine Customer Value<br /><br />
    8. 8. Companies that are Good in Delivering Customer Value <br /><br />
    9. 9. 2. Customer Satisfaction<br />The feeling of satisfaction or dissatisfaction of the customer from a product’s outcome versus customer’s expectation.<br /><br />
    10. 10. Measurement for Customer Satisfaction<br /><br />
    11. 11. 3. Customer Satisfaction depends on Quality<br /> Quality is the totality of features and characteristics of a product or service that bear of its ability to satisfy needs.<br /><br />
    12. 12. 4. Maximize Customer Lifetime Value<br />Customer<br />Profitability<br />Customer<br />Equity <br />Lifetime <br />Value<br /><br />
    13. 13. Customer Profitability in relation to 80-20 or 150-20 Rule <br /> 20% of the customer often generates 80% or more of the company’s profits.<br /> 20% most profitable customers generate as much as 150% of the profits of a company; the 20% least profitable lose 100% of the profits.<br /><br />
    14. 14. 5. Customer Relationship Management<br />The process of carefully managing detailed information about individual customers and all customer ”touch points” to maximize customer loyalty.<br /><br />
    15. 15. Maximize Costumer Loyalty through Customer Relationship Mgmt by:<br />Identifying your prospects and customers <br />Differentiating customers by their needs and their value to company<br />Interacting with customers<br />Customizing for each customer.<br /><br />
    16. 16. 6. Increasing Value of Customer Base by:<br />Reduce the rate of defection <br />Increase longevity of relationship<br />Enhance ”share of wallet”<br />Terminate low-profit customers<br />Focus more effort on high profit customers<br /><br />
    17. 17. 7.Customer Development Process<br />Inactive or <br />Ex-customers<br />
    18. 18. 8. Maintaining Customer is better than Acquiring Customer<br />Acquisition of customers can cost more than retaining customers.<br />The average customer loses of its customer each year. <br />A reduction to the customer defection rate can increase profits by to .<br />The customer profit rate increases over the life of a retained customer. <br />5X<br />10%<br />5%<br />25%<br />75%<br />
    19. 19. 10. Using the Database<br />To identify prospects <br />To target offers <br />To deepen loyalty<br />To reactive customers <br />To avoid mistakes <br /><br />
    20. 20. Summary <br />The company should meet the customer perceived value in order to satisfy the total customer benefits and total customer cost.<br />The company should constantly evaluate if the costumer needs & wants are met<br /> High satisfaction leads to high customer loyalty. <br />Maintaining customer is easier than acquiring new costumer.<br /><br />
    21. 21. Conclusion <br />The heart of satisfying and maintaining customer is to meet their expectations on the product/services and create good relationship thus creates customer loyalty. <br /><br />
    22. 22. Thank you! Ch 5 and Creating Customer Value, Satisfaction & Loyalty <br />Joan Soliven<br />April 8, 2011<br /><br />