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Customer value and satisfaction

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  • 1. BUILDING CUSTOMER VALUE & SATISFACTION
  • 2. Defining Customer Value and Satisfaction
    • Customer Perceived Value (CPV)
      • It is the difference between the prospective customer’s evaluation of all the benefits & all the costs of an offering and the perceived alternatives
    • Total Customer Value:
      • Perceived Value is combination of economic , functional and psychological benefits
    • Total Customer Cost :
      • Bundle of costs customer incurs in evaluating, obtaining, using & disposing market offering
  • 3. Determinants of Customer Delivered Value
  • 4. Customer Value
    • Customers seek to maximize value by
      • estimating which offer (product/firm) delivers the most value (CPV)
      • forming an expectation of value and acting upon it (purchase)
      • evaluating their usage experience against the expectations
    • Satisfaction results when expectations are equaled or surpassed
  • 5. Superior Value Delivery
    • Reliance Infocomm
    • Dell Computers
    • Xerox Copiers
    • McDonald's
    • Nike
    • Oakley Shades
    • Asian Paints
  • 6. Customer Satisfaction
    • Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to the expectations
    • Consumer Expectations:
      • Past Buying Experiences
      • Friends & Associates advice
      • Competitor's Information and Promises
  • 7. OBJECTIVE
    • VALUE CREATION
    • AND
    • DELIVER HIGH CUSTOMER VALUE
  • 8. Creation & Delivery
    • Value Selection
    • Value Creation
    • Value Communication
    • Value Enhancement
  • 9. Value Selection & Creation
    • Value Proposition:
      • Whole cluster of benefits the company promises to deliver
    • Value Chain
      • Value chain is a synthesis of activities that are performed to design , produce, market, deliver, and supports its products
    • Nine Value creating activities consisting of Five primary activities & Four support activities
  • 10. The Generic Value Chain
  • 11. Delivering Customer Value and Satisfaction
    • Smooth Management of Core Business Process
    • Core Business Processes:
      • The market sensing process : Marketing Intelligence
      • The new offering realization process: Researching, Developing & Launching
      • The customer acquisition process: Defining Target Markets & Prospecting
      • The Customer Relationship Management Process: Building understanding, relationships & offerings
      • The fulfillment management process: Receiving & Approving orders, shipping the goods on time & collecting Payment
  • 12. Case of ABN AMRO Bank
    • Savings Account – SAVING ADVANTAGE ACCOUNT
    • Minimum Average Monthly Balance = 10,000/-
    • Value For Money
    • Free Cheque pick from your Home or Office
    • Cash Delivery
    • Extended Banking Hours
    • Sunday Banking
    • Free Home Delivery of Pay Orders & Demand Drafts
    • Free Local Pay Orders
    • Free Cheque Return Protection
    • Free Metro Cheque Clearing
    • Free Money Transfers
  • 13. Federal Express
    • 24 hours Delivery
    • Track the Package through Company’s website
    • Identification of the person who signed it
    • All services Free of Cost
  • 14.
    • The Value Delivery Network (Supply Chain)
    Value Delivery
  • 15. Value Delivery Network
    • A firm’s orientation to look beyond its own operations
    • Partnering with specific suppliers and distributors to create a superior value delivery network (Supply Chain)
  • 16. Levi Strauss’s Value-Delivery Network
  • 17. Superior Value Delivery Network
    • AMWAY Delivery Model
    • PVR
    • AMAZON
    • HLL
    • MARUTI
  • 18. Attracting and Retaining Customers
    • Partner relationship management (PRM)
    • Customer relationship management (CRM)
  • 19. Attracting and Retaining Customers
    • Attracting Customers:
      • Suspecting
      • Prospecting & Targeting
      • Conversion
    • Computing the Cost of Lost Customers
      • Customer churn
      • Lifetime value
  • 20. The Customer-Development Process
  • 21. Attracting and Retaining Customers
    • The Need for Customer Retention:
      • New Product Introductions
      • Positive WOM
      • Brand Messenger
      • Low Attention to competing Brands
      • Less Sensitive to Price
    • Measuring Customer Lifetime Value (CLV) :
      • Present value of Stream of Future profits expected over customer’s lifetime purchases
  • 22. Relationship management
    • Move from a ‘transactional’ model of marketing to a ‘relationship’ model
    Source: Christopher et al (1991)
  • 23. What is CRM? “ CRM is adopting customer-centric business strategies, implementing these strategies by changing how customers do business and how people do work and then enabling new strategies, new customer interactions and new workflow by providing appropriate technology support ”
  • 24. Attracting and Retaining Customers
    • Customer Relationship Management (CRM): The Key
      • AIM- Customer equity: Total of the discounted lifetime values of all the firm’s customers
      • Three drivers of customer equity
        • Value equity: Customer’s objective assessment of utility of an offering based on perceptions of its benefits relative to costs
        • Brand equity: Customer’s subjective & Intangible assessment of the brand above & beyond its objectively perceived value
        • Relationship equity: Customer’s tendency to stick with the brand above & beyond the above
  • 25. Attracting and Retaining Customers
    • Five levels of investment in customer relationship building
      • Basic marketing: Sales person simply sells the product
      • Reactive marketing: selling + encouraging to call
      • Accountable marketing: Salesperson calls the customer
      • Proactive marketing: Regular contact to customer
      • Partnership marketing: Continuous working with the customers so as to improve their performance
  • 26. Strong Customer Bonds
    • Keys to Success
    • Adding Financial Benefits
    • Adding Social Benefits
    • Adding Structural Ties
    • Frequency programs
    • Club memberships
  • 27. Strong Customer Bonds
    • Keys to Success
    • Adding Financial Benefits
    • Adding Social Benefits
    • Adding Structural Ties
    • Personalize customer relationships
  • 28. Strong Customer Bonds
    • Keys to Success
    • Adding Financial Benefits
    • Adding Social Benefits
    • Adding Structural Tie
    • Create long-term contracts
    • Charge less for ongoing purchases
    • Link product to long-term service
  • 29. Customer Profitability, Company Profitability, and Total Quality Management
    • Measuring Profitability
      • Profitable customer
  • 30. Allocating marketing investment according to customer value