In this era of fast-paced competition, the only way to stay afloat is to efficiently manage the most important constituent in business: the customer.

1. Building Customer
Loyalty
By
Bolaji Okusaga
Managing Director, The Quadrant Company

2. Who is the Customer?
 The Customer is that person or Institution that
makes a demand for your products or service
offering.
 A Customer is the target for specific products
or service and helps add value to an enterprise
through the demand he / she makes of specific
offerings.
 The Customer is the most crucial actor in the
marketing process because there can be no
marketing without the Customer.

3. What does the Customer
Want?
 The CUSTOMER seeks for the satisfaction of
his / her needs in the market.
 The PRODUCERS of goods and services seek
to satisfy the desire of Customers for value in
return for profit.
 The CUSTOMER demands the value inherent
in the consumption of products or services and
also gives value to the PRODUCER in the
process.

4. Perfect Market: The Old
Order
 In an imperfect market, where the DEMAND for
specific products or services outweighs
SUPPLY, producers are usually price-makers,
who make little effort to woo the Customer.
 This situation occurs in a monopoly or an
oligopoly.
 Here, producers dictate their terms and
Customers strive to meet these terms.

5. Enter the Era of
Imperfect Markets
 With globalization, increased innovation and its
attendant atmosphere of fierce competition,
where monopolies like Microsoft and
Oligopolies such as Coca-Cola, IBM, Nestle
and PepsiCo are now facing stiff competition
from emerging enterprises in China and India,
the era of price-makers in perfect markets are
over.
 The death of perfect markets has led to a new
era where competitive edge is not only driven
by product quality but by distribution, delivery
and customer service innovation.

6. The Demands of a
Customer Service Culture
 Global exposure to technology and skilled Man power,
led to the advent of product parity in most industry and
the consequent erosion of rigid customer loyalty.
 Price now became a big consideration in choosing
between competing brands and products.
 In this dispensation, consumers became price-
grabbers, shopping for price and not out of loyalty.
 However given the need for differentiation beyond price
and product quality, companies now started to innovate
in the area of product delivery, turn-around time and
Customer service.
 This shifted emphasis away from Total Quality
Management (TQM) to Total Relationship Commitment
(TRC) and redefined the whole concept of Marketing.

7. Enter the Era of
Maxi-Marketing...
 Noting that traditional marketing with its emphasis on
Product, Place, Price and Promotion, does not
adequately address Customer needs, Maxi-marketing
a blueprint centered around Customer Relationship
Management (CRM) emerged.
 Customer Relationship Management is a process or
methodology used to learn more about customers'
needs and behaviours in order to develop stronger
relationships with them.
 CRM as a process which brings together pieces of
information about customers, sales, marketing
effectiveness, responsiveness and market trends,
helps to shape a Company’s Business Strategy

8. CRM: The New Reality
 Customer Loyalty is crucial in the drive at year
on year profit.
 For a company to stay solvent and profitable, it
must manage its customer churn rate and
increase its customer retention capacity.
 To drive this strategic intent, Companies must
court the Customer by meeting or surpassing
his expectations through availing the Customer
a robust value proposition well beyond the
competition.

9. What is Customer
Loyalty?
 Customer loyalty describes the tendency of a
Customer to choose a product or service over
another. Note the use of the word "choose" .
 Though; customer loyalty becomes evident when
choices are made and actions taken by Customers.
Customers may express high satisfaction levels with
a company in a survey, but satisfaction does not
equal loyalty.
 Loyalty is demonstrated by the actions of the
Customer; Customers can be very satisfied and still
not be loyal.

10. Retaining the Loyalty of
the Customer – What
Imperatives? compare you with your
 If your Customer could
competitor in terms of your product and price,
would you be better off?
 Companies generally need to know two key
principles about customer decision making:
1. Customers never buy solely on price
even tough we think they do.
2. Prices may be transparent to Customers,
but value is usually opaque. By building
a Customer service culture, companies
build added value to their offerings.

11. Moving the Conversation
away from Price to Value
PRODUCER /
SERVICE PROVIDER CUSTOMER
VALUE-SELLING
A Customer An Efficiency
Relationship driven Value PROFIT Expectant Value Equation
Proposition

12. How To Sell on Value
 Value delivery is the basis of the existence of
businesses.
 However, given the gradual decline in the
differentiation of offerings based on quality,
value delivery in most industry began to wear
the toga of monotony and stasis.
 Value delivery soon became defined in terms
of product delivery, distribution and Customer
service innovation.
 Product and Service delivery based on the
understanding of Customers changing needs
and attitude became the order of the day.

13. Selling on Value: Cases
from the Masters
DELL
Cut off the middleman in the distribution of Computer
Hardware and Customized offerings to suit
individual Consumers, thereby beating competitors
like HP, Compaq and IBM.
PEPSICO
Shifted emphasis from the production of carbonated
soft drinks to production of energy drinks and other
related offerings in order to take advantage of
changes in trends and consumption attitude, thereby
beating a competitor like Coca-Cola in terms of profit.

14. Selling on Value: The
Nigerian Experience
ZENITH BANK
Redefined the concept of Banking in Nigeria by
introducing On-Line-Real-Time Banking and
Convenience Banking before it became the minimum
standard of entry thereby beating Competitors like
Guaranty Trust and Diamond Bank.
EKOCORP
Redefined health care delivery in Nigeria by being the
first publicly quoted Hospital. Through its access to
funds from the capital market, it was able to raise
enough funds to procure state of the art medical
equipment and hire experienced personnel thereby
raising the bar in private health care delivery.

15. How to Get There
 It is proven that innovation based on
technology or efficiency in production not
targeted at the customer do not positively
affect the bottom-line.
 Most profitable innovation therefore are built
around the Customer.
 This is because the Customer is at the core of
Value Delivery and Profit Maximization.
 It is therefore essential to build a Customer
centric value delivery process in order to
engender loyalty.

16. What Does it Take?
 UNDERSTAND WHAT YOUR CUSTOMER
REALLY VALUE
You may find that product cost is a small
component of the customer’s total cost and
that price is only one of the many variables
that customers consider. To build loyalty you
most understand the Customer’s Life Time
Value (LTV) and align this with your Product’s
Lifecycle.

17. What Does it Take?
2. DEVELOP FLEXIBLE MARKET
OFFERINGS
No Company can satisfy all Customer segments
with the same offering. Companies need to
create flexible market offerings. These are
bundles of products, service and information that
Customers can configure and customize to suit
their priorities. Companies sometimes bundle
services with their product, but the truth is that
not all Customers value these services. Allow
Customers to choose the service they value and
pay for only what they use.

18. What Does it Take?
3. COMMUNICATE YOUR VALUE
PROPOSITION
You need to educate Customers about the
elements of your value proposition in order for
them to fit these into their equation. Without
this, your sales force will only use price as its
competitive weapon. There is therefore the
need to educate your customers on the
economic benefits of the Non-Price-Variables
embedded in your offering.

19. What Does it Take?
4. BE OPEN AND HONEST
A lot of People believe that transparency is
an enemy of profit. They reason that
Customers will take advantage of better
information to drive down prices and profit,
but the truth is that there can be no loyalty
where there is no trust and trust is better built
in an open and honest relationship.
TRANSPARENCY:
THE CALL CENTRE PROFITABLE INFORMATION

20. What Does it Take?
5. DEVELOP A CUSTOMER DATA-
MINING PROCESS
Customer data and models based on this data
can help inform you of customers most likely to
respond and become loyal, no matter what
kind of front-end marketing program you are
running or how you "wrap it up" and present it
to the customer. The data will tell you who to
promote to, and how to save precious
marketing naira in the process of creating
customers who are loyal to you.

21. Parting Shot!
“ It is much less costly to generate
Customer Loyalty and retain
Customers, than to deploy marketing
money in the quest at attracting new
Customers”

22. Thank You.