Customer Service Excellence - Lecture 8Presentation Transcript
B2B/B2C – The context of customer service excellence Customer Service Excellence – week 9
THE LADDER OF LOYALTY Advocate Supporter Client Customer Prospect Suspect PROSPECT - Someone whom you you believe may be persuaded to do business with you CUSTOMER - Someone who has done business just once with your organisation CLIENT - Someone who has done business with you on a repeat basis but may be negative, or at best neutral, toward your organisation SUPPORTER - Someone who likes your organisation, but only supports you passively ADVOCATE – Someone who actively recommends you to others, who does your marketing for you SUSPECT - A suspect is someone who comes across your companies’ promotion. They are a potential prospect for your company .
The number one mistake that most companies make at the beginning of the (CRM) process is to ask the wrong question : “How can we use this technology to sell our customers more stuff?”.
The question they should be asking is : “How can we use this new technology to make our customers’ lives better; how can we make our product or service more convenient, faster, cheaper, more tailored or more appropriate?”.
Don Peppers, 2003 .
Quoted in Customer Relationship Management
Perspectives from the Marketplace
Knox, Maklan, Payne, Peppard & Ryals
CRM – Some Definitions
A strategic approach to improving shareholder value through the development of appropriate relationships with key customers and customer segments.
CRM unites the potential of IT and relationship marketing strategies to deliver profitable, long-term relationships.
Importantly, CRM provides enhanced opportunities to use data and information both to understand customers and implement relationship marketing strategies better.
This requires cross-functional integration of people, operations and marketing capabilities enabled through information technology and applications.
Relationship Marketing – Creating Stakeholder Value
It costs 6 times more to acquire new customers than look after your existing customers
Loyalty / retention pays real dividends, as customers :
Spend more (increased ‘share of wallet’)
Get comfortable dealing with us & are more receptive to new Ps &Ss
Spread positive ‘word of mouth’
Have greater profit potential
Cost less to serve
Are are less price sensitive
Are more forgiving when something goes wrong
Make our marketing program more efficient (& effective)
Customer Retention Strategies Internal marketing Bonding Targeting customers for retention Customer Retention Building trust Promise fulfillment Service recovery
RM – A Premature Death !
Even with the potential benefits of technology :
Customer satisfaction is falling
Complaints, boycotts and other discontent is rising
Consumers simply can’t accommodate to many 1:1s
Giving and getting are out of balance
‘ Loyals’ can lose out in focus on new customers
Medium and small customers can be ignored
Many companies are creating problems not solutions
Preventing the Premature Death of Relationship Marketing Susan Fournier, Susan Dobscha, and David Glen Mick, HBR Jan/Feb 1998.
Sources of Differential Advantage n.b. Convert DA’s into Value to Customer Product / Service Promotion Place Price People Process Physical evidence Form / design Salesforce Availability High - Quality Competence Ordering Appearance Features Creativity Coverage Lower - Value Courtesy Delivery Premises Performance Co-operative promotions Expertise Range Credibility Support Technology Conformance Branding Performance Credit facilities Reliability Handling complaints Awards Durability Packaging Delivery Trade-in Responsiveness Computerisation Indep. reviews Reliability Effectiveness Guarantees Trade-up Communications Communications Clippings Upgradability Image / Style Support Promotions Commitment Services Fact file Service Events Quality of Intermediaries Consistency ‘ Extra mile’ Guarantees Documentation Training Communications Support
Case Insight: National Trust
The National Trust exists to look after special places, for ever, for everyone and is organised around 11 geographic regions/ countries. In 2006/2007 one of the major income streams for the national Trust was through membership levies, this equated to £100 million.
Marketing objectives for the National Trust include new member acquisition and existing member retention.
How could the National Trust use electronic technologies to increase their understanding of new and existing members and build member loyalty and retention?
How do you manage in the different contexts?
Characteristics of Services
Intangibility - services cannot be touched, seen, tasted, heard or smelled before purchase
Inseparability - services cannot be stored and sold later, they cannot be separated from the provider
Perishability - services cannot be stored, so a better management of demand is necessary
Heterogeneity (or variability) - the quality of the service is dependant on the person providing it (therefore it will vary)
The extended marketing mix
The additional elements deal with the characteristics of services
People - good training for service staff, appearance of staff, staff carefully selected, and held more accountable
Process - fast service tills, part time staff to cover highest periods of demand, easy booking systems for appointments
Physical evidence - internal and external appearance of premises, short queues, modern equipment, pleasant waiting areas
Product Price Promotion Place
Characteristics - FMCG
Fast moving consumer goods – e.g. confectionery, wash powder
Manufacturers of products that are purchased often and rapidly consumed
Logistics and supply chain important
Margin can be low
Key differences –
Products – purchased often, rapidly consumed, packaging important
Price - relatively inexpensive
Place – manufacturer to distributor/wholesaler to retailer, internet
Promotion – branding important, heavy advertising – pull and push promotion
What implications do these operational issues have on your customer service?
Seth Godin - good marketing
Seth Godin talking at Google - All marketers are liars
Characteristics of Business Markets
Fewer but larger buyers
Demand often derived from consumer demand - e.g. car industry buys steel because consumers buy cars
Buying unit differs - more rational approach, more people involved
Buying process usually more formalised
Decision Making Unit (DMU)
User - end user, may initiate request and help specify
Influencer - technical personnel or specialists, help specify, provide information
Buyer - formal authority holders, help specify, select vendors, negotiate
Decider - final approver (often also buyer)
Gatekeeper - control information flow to others, can prevent sales people gaining access
Types of buying decision
Straight re-buy - goods re-ordered without modification
Modified re-buy - opportunity for competitors to enter discussions, essential service quality is good
New buy - greater risk or cost, the fuller decision making unit involved
Factors influencing industrial buying behaviour ENVIRONMENTAL Levels of demand Economic prospects Interest rates The pace of technological change Political and legal structures Competitive structures ORGANISATIONAL Objectives Policies Structures Systems & degree of centralisation Processes and procedures Managerial attitudes to risk Financial l resource Previous experiences BUYING CENTRE Roles in DMU Group processes Interpersonal interactions INDIVIDUAL Personal objectives Job position Attitude to risk Previous experiences Technical knowledge Motivation BUYING DECISION SOURCE: Adapted from Webster and Wind, 1972
size of organisation
type of purchasing organisation
Marketing Mix - key differences
Greater degree of negotiation
Bid pricing may be involved
Greater emphasis on personal selling
Increasing use of e-commerce, extranets, etc
Distributors and agents may be involved
Business to Business Price-setting
Economic value to the customer pricing.
Large capital projects
Product – complex, major investments
Price – high level, infrequent decision
Place – direct sales or through value-added resellers (VAR)
Promotion – specialist trade advertising, technical sales people
Value added by training post-installation, extranet support, etc
What implications do these operational issues have on your customer service?
6th annual B2B debate - digital media
the future of b2b???
Not for Profit Sector Schools Colleges Health Sector Leisure Services Public-sector Social services Charities Churches Voluntary organisations The Arts
Objectives not ‘profit’ based
Performance to objectives more difficult to measure
May be ‘ to improve quality of life’
Or ‘to involve local people in decisions that affect them’
Or ‘to tackle inequality, discrimination and disadvantage’
Or ‘to raise $xxx funds to restore the building’ or ‘ to conduct further research into cancer treatments’
Will differ according to aims
Charity - donors, volunteers, governments
Education - prospective students, parents, ‘feeder’ schools or colleges, governments
Public sector - residents, national government, new business from outside the area
Key marketing mix differences
Product - usually ideas, and services
Price - value for money approach
Place - short distribution channels
Promotion - emphasis on PR, face to face fund raising, retail outlets, service personnel, lobbying of government departments
Give and Tell
As a charity…
1. How would you organise and develop your customer service strategy?
(Position?Who?How?Marketing Mix to support position? Strategic collaboration with suitable partner?)
Market research and management information important
Marketing planning still as relevant
Target markets can be segmented
Relationship marketing is important in this sector - particularly charities
Characteristics of SME
Small to medium sized enterprises
Managed by owner/part owner
Small market share
‘ Small’ varies sector to sector
In some, measured by number of employees, and others by turnover
SME Mix – key differences
Place – many small retailers, small office/home office(soho), direct marketing/internet
Price – responsive.
Promotion – personal selling (by owner), website, limited by size of budget available