Chapter 5 creating customer value, satisfaction and loyalty

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by Group 4, Markma: Chapter 5 - Creating Customer Value, Satisfaction and Loyalty

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  • The CUSTOMER is now on top of the organizational hierarchy
  • Customer Perceived Value (CPV) = Difference between all benefits and costs of an offering and the perceived alternatives
  • Loyalty (dog) = deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behaviorQuality (check) = totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs
  • Magnet = marketing is the art of ATTRACTING and KEEPING profitable customersProfitable Customer (thumbs up) = revenue from person/household/company > company’s cost of attracting, selling and servicingSatisfaction (smiley face) = Customer Lifetime Value
  • Customer Relationship Management(Stick figure 2)= carefully managing detailed information about individual customers and all customer touch points to maximizecustomer loyalty
  • Framework for CRM:1.Identify (eyes) prospects and customers
  • 2. Differentiate (nose) customers by needs and value to company
  • 3. Interact (smile) to improve knowledge
  • 4. Customize (ears)for each customer
  • CRM Strategies (how winning companies improve their customer base):1. Reduce (2 hearts crossed out) the rate of defection
  • 2. Increase (heart going up) longevity
  • 3. Enhance (heart with exclamation point) share of wallet
  • 4. Terminate (broken heart) low-profit customers
  • 5.Focus more effort (heart with explosion)on high-profit customers
  • Chapter 5 creating customer value, satisfaction and loyalty

    1. 1. Chapter 5: Creating Customer Value, Satisfaction and LoyaltyGroup 4Crisostomo, Kathleen LizetteJongco, KristofferPinon, Ralph RaymundSiton, Galicano
    2. 2. Selected Presentation
    3. 3. Visual Model: Creating Customer Value, Satisfaction and Loyalty Raymund C. Piñon Marketing Management V57 April 27, 2010
    4. 4. Rationale• The 3rd important task of Modern Marketing:
    5. 5. ObjectivesAt the end of the presentation, the participants should be able to understand concepts related to the 3rd marketing task of CONNECTING WITH CUSTOMERS1. Customer Value, Customer Satisfaction, Customer Loyalty and how do we deliver them?2. What is the lifetime value of customers?3. How can companies cultivate strong customer relationships?4. How can companies both attract and retain customers?5. What is database marketing?
    6. 6. To Win Customers and ….Beat Competition!!! Customer-centeredX Traditional
    7. 7. To Win Customers and ….Beat Competition!!! SatisfactionValue Loyalty
    8. 8. Customers’ Perceived Value Customers are value maximizers Total Total Costs DeliveredBenefits Value Money Product Time Service Effort Personnel Psychological Image
    9. 9. Steps in Customer Value AnalysisIdentify features & benefits Assess company’scustomers value Assess qualitative importance and competitors’ of attributes & benefits performance on different values against rated performance Examine ratings of specific segments Monitor customer values over tme
    10. 10. Delivering High Customer ValueValue Proposition Value Delivery System
    11. 11. Total Customer Satisfaction Perceived Buyer’sPerformance Expectation Satisfaction _ =
    12. 12. Total Customer SatisfactionSatisfaction is Related to Loyalty
    13. 13. Total Customer SatisfactionInfluence of Customer Satisfaction
    14. 14. Total Customer SatisfactionMonitoring Customer Satisfaction Periodic Surveys Customer Loss Rate Mystery Shopper Competitors’ Performance
    15. 15. Total Customer SatisfactionSatisfaction Will Also Depend on Quality
    16. 16. What is Quality?• Totality of features and characteristics of products or services that satisfy stated or implied needs Product or Service Expectations Meets or exceeds = or >
    17. 17. Customer Lifetime ValueArt of attracting and keeping profitable customers
    18. 18. Maximizing Customer Lifetime Value Customer ProfitabilityCustomer Equity Lifetime Value
    19. 19. Maximizing Customer Lifetime Value Customer Profitability Analysis C1 C2 C3 HighlyP1 + + + profitable product ProfitableP2 + product UnprofitableP3 - - product HighlyP4 - unprofitable product High-profit Mixed-bag Losing customer customer customer
    20. 20. Maximizing Customer Lifetime Value Customer Profitability Analysis Customer Portfolios • acquaintancesActivity-Based Costing • friends • partners
    21. 21. Maximizing Customer Lifetime Value Measuring Customer Lifetime Value Year 0 Year 1 Year 2 Year 3 Year 4Number of CustomersRevenue per CustomerVariable Cost per CustomerMargin per CustomerAcquisition Cost per CustomerTotal Cost or ProfitPresent Value
    22. 22. Maximizing Customer Lifetime Value Measuring Customer Lifetime Value Year Year Year Year Year Year Year Year 0 1 2 3 4 5 6 7Number of CustomersRevenue per CustomerVariable Cost per CustomerMargin per CustomerAcquisition Cost per CustomerTotal Cost or ProfitPresent Value
    23. 23. Cultivating Customer Relationships
    24. 24. Customer Relationship Management Key to retaining customers is relationship marketing 2. Differentiate customers in terms of:1. Identify prospects and customers a. Their needs b. Their value to your company3. Interact with individual customers to 4. Customize products, services improve knowledge about needs and and messages to each customer build stronger relationships
    25. 25. Customer Relationship Management Increasing Value of Customer Base 1. Reduce customer defection 2. Increase longevity of relationship 3. Enhance growth potential of each customer 4. Make low-profit customers profitable or weed out 5. Focus on high-value customers
    26. 26. Customer Relationship ManagementFocuses on attracting and keeping right customers, and satisfying their needs
    27. 27. Customer Relationship Management Attracting and Retaining Customers Reducing Defections Retention Dynamics
    28. 28. Partners Advocates Members Clients Repeat Inactive or Customer Ex-Customers 1st-Time Customer Prospects DisqualifiedPotentials Prospects
    29. 29. Customer Relationship Management Building Customer Loyalty Interacting with Customers Creating Loyalty ProgramsPersonalizing Marketing Creating Institutional Ties
    30. 30. Customer Database and Database ManagementCustomer Database Data Warehousing Data Mining
    31. 31. Customer Database and Database Management Choose which customersIdentify prospects receive a particular offer Deepen loyalty Reactivate customer purchases Avoid mistakes
    32. 32. Summary The 3rd important marketing task of CONNECTING WITH CUSTOMERS1. Customer Value, Customer Satisfaction, Customer Loyalty and how do we deliver them2. Lifetime value of customers3. How companies cultivate strong customer relationships4. How companies attract and retain customers5. Database marketing
    33. 33. Individual Reports
    34. 34. Crisostomo, Kathleen Lizette C.MARKMAChapter 5 - Creating Customer Value, Satisfaction,and Loyalty
    35. 35. The CUSTOMER isnow a top priority inthe modernorganization chart
    36. 36. Customer Perceived Value (CPV) =Difference between all benefitsand costs of an offering and theperceived alternatives
    37. 37. Loyalty = deeply held commitmentto re-buy or re-patronize apreferred product or service in thefuture despite situationalinfluences and marketing effortshaving the potential to causeswitching behaviorQuality = totality of features andcharacteristics of a product orservice that bear on its ability tosatisfy stated or implied needs
    38. 38. Marketing is the art ofATTRACTING and KEEPINGprofitable customersProfitable Customer = revenuefromperson/household/company isgreater than the company’s costof attracting, selling andservicingSatisfaction = CustomerLifetime Value
    39. 39. Customer Relationship Management =carefully managing detailed informationabout individual customers and allcustomer touch points to maximizecustomer loyalty
    40. 40. Framework for CRM:1. Identify prospects andcustomers
    41. 41. 2. Differentiate customers byneeds and value to company
    42. 42. 3. Interact to improve knowledge
    43. 43. 4. Customize for each customer
    44. 44. CRM Strategies (how winning companiesimprove their customer base):1. Reduce the rate of defection
    45. 45. 2. Increase longevity
    46. 46. !3. Enhance share of wallet
    47. 47. !4. Terminate low-profit customers
    48. 48. !5. Focus more effort onhigh-profit customers
    49. 49. Creating Customer Value, Satisfaction and Loyalty KRISTOFFER Z. JONGCO APRIL 27, 2012
    50. 50. Objective: How is this created?• Through customer value• Steps in customer value analysis?• Through customer satisfaction• The CRM Framework?• Through customer loyalty• Customer retention: using database
    51. 51. Customer Value• What customer gets from a product & what he has to give to attain it
    52. 52. Steps: Customer Value Analysis• Know major attributes & benefits• Assess importance• Assess performances• Examine ratings• Monitor customer values
    53. 53. Customer SatisfactionMeasuredby number of repeat and happy customers
    54. 54. CRM Framework• Identify customers• Differentiate customers• Interact• Customize for each customer
    55. 55. Customer Loyalty Measure of successof supplier in retaininga long term relationship with customer
    56. 56. Customer Retention• Use Database-Identify/attract prospects-Target offers-Deepen loyalty-Reactivate customers-Avoid mistakes
    57. 57. 5 Steps: Customer Value Retention CUSTOMERS Customer LoyaltyCustomer SatisfactionFramework
    58. 58. Summary• What is customer value• 5 Steps in customer value analysis• Customer satisfaction and framework• What is customer loyalty• All about customer retention• Using Database
    59. 59. Creating Customer Value, Satisfaction and Loyalty by Galicano Siton
    60. 60. Creating Customer Value, Satisfaction and Loyalty Value Quality Perceived by the Customer Customers Customer Satisfaction Frontline People Loyalty Middle Management Top Management Profit for the stakeholders

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