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Chapter 5 Creating Customer Value, Satisfaction And Loyalty
 

Chapter 5 Creating Customer Value, Satisfaction And Loyalty

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    Chapter 5 Creating Customer Value, Satisfaction And Loyalty Chapter 5 Creating Customer Value, Satisfaction And Loyalty Presentation Transcript

    • Part 3 : Connecting with Customers Chapter 5 - Creating Customer Value, Satisfaction and Loyalty
    • Maximizing Customer Lifetime Value
      • Ultimately, marketing is the art of attracting and keeping profitable customer.
      • Losing profitable customers can dramatically affect a firm’s profits. The cost of attracting a new customer is estimated to be five times the cost of keeping a current customer happy
      • Implication is that a company could improve its profits by “firing” its worst customers
      • The key to retaining customers is relationship marketing
    • Cultivating mCustomer Relationships
      • Maximizing customer value means cultivating long term customer relationships. Companies are now moving away from mass marketing to mass customization to build strong customer relationships
      • As companies have grown proficient at gathering information about individual customers and business partners, they have increased their ability to individualize market offerings, messages, and media
      • Mass customization is the ability of a company to meet each customer’s requirements – to prepare on a mass basis individually designed products, services, programs & communications
      • These steps can be done because of business information technology
    • Customer Relationship Management (CRM)
      • Thus, the process of managing detailed information about individual customers and carefully managing all customer “touch points” to maximize customer loyalty is Customer Relationship Management (CRM).
      • A customer touch point is any occasion on which a customer encounters the brand and product
      • Example: For a hotel, the touch points include reservation, check in & out, room service, exercise facilities, restaurant & bar
      • A four step framework for one to one marketing that can be adapted to CRM marketing:
      • Identify your prospects and customers.
      • Differentiate customers in terms of their needs and their value to your company
      • Interact with individual customers to improve your knowledge about their individual needs and to build stronger relationships
      • Customize products, services, and messages to each customer
    • Customer Databases and Database Marketing
      • Marketers must know their customers. And in order to know the customer, the company must collect information and store it in a database and do database marketing
      • Customer database is an organized collection of comprehensive information about individual customer or prospect that is accessible for marketing purposes
      • Database marketing is the process of building, maintaining, and using customer databases for the purpose of contacting, transacting, and building customer relationship
      • In general, companies can use their database in five ways:
      • To identify prospects
      • To decide which customers should receive a particular offer
      • To deepen customer loyalty
      • To reactivate customer purchases
      • To avoid serious customer mistakes