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Connecting With Customers
What Marketers See
Slide 2 of 34
What Customers See

Slide 3 of 34
Consumer Thinking

Slide 4 of 34
Challenge

Slide 5 of 34
Solution

Connecting with Customers by Creating
Long-Term Loyalty Relationships
Slide 6 of 34
Connecting with Customers
• How can companies deliver customer value
and satisfaction?
• What is the lifetime value of a c...
Connecting with Customers
• How can companies deliver customer value
and satisfaction?
• What is the lifetime value of a c...
Customer Value and Satisfaction
Shifting to a Holistic Marketing approach to deliver
Customer Value and Satisfaction

Holi...
Traditional Org vs Modern CustomerOriented Org
Shifting to a holistic marketing approach to
deliver customer value, satisf...
Delivering Customer Value
Customer
Perceived value
Total customer
benefit

Determinants
of Customer
Perceived Value

Total customer
cost

Product
be...
Value Concepts
Profit

Customer
Value

$6,000

$20,000

-0-

5,000

19,000

$1,000

4,000

18,000

2,000

3,000

Worth to ...
Value Proposition
Core positioning:
• Safety

Other benefits:
• Good performance
• Design
• Environmentally friendly

Slid...
Satisfaction
Customer Satisfaction

Expectations

Slide 16 of 34
Customer Expectations
Previous purchases
Friends advice
Marketers’ / competitors
Expectations

Slide 17 of 34
Monitoring Satisfaction
Influence of
Customer Satisfaction

Measurement
Techniques

Customer
Complaints
Slide 18 of 34
Measurement Techniques
Customer Loss Rate
Surveys

Mystery Shopper
Slide 19 of 34
Customer Complaints
54% - 70%

5%

Buy again if resolved

Complain

95%

Tell 5
people

If resolved quickly

25%
Dissatisf...
Product and Service Quality
Performance

Conformance

Quality

Satisfaction

Profitability

Slide 21 of 34
Connecting with Customers
• How can companies deliver customer value
and satisfaction
• What is the lifetime value of a cu...
Maximizing Customer Lifetime Value

20% of
Customers

80% of
Profits

Customers

Slide 23 of 34
High
Low

Potential Value

Customer Lifetime Value Cycle
Valuable customer

Onetime buyer

Most Valuable customer

Onetime...
Connecting with Customers
• How can companies deliver customer value,
satisfaction, and loyalty?
• What is the lifetime va...
Customer Retention
Acquiring new customers costs

5x more

The average company loses

than retaining current customers

10...
Cultivating Customer Relationships
Customer Information
• Differentiate
• Customize
• Personalize

CRM

• Share

Slide 27 ...
Customer Relationship Management (CRM)

One-to-One Marketing
Customer Empowerment
Customer Reviews & Recommendations
Slide...
One-to-One Marketing
1. Identify prospects
and customers

2. Differentiate
customers

4. Customize
3. Interact with
each c...
Customer Empowerment

Energizing customers

Brand Evangelists
Slide 30 of 34
Customer Reviews and Recommendations

Purchase
Personal circle
influence

• Online Ads
• Offline Ads
Brand
identification
...
The Marketing Funnel

Journey

Partner
Advocate

Supporter
Customer
Tryer
Prospects
Slide 32 of 34
Index
• How can companies deliver customer value,
satisfaction, and loyalty?
• What is the lifetime value of a customer, a...
Databases & Database Marketing
Customer databases
• Name, address, telephone #
• Purchase history
• Demographics
• Psychog...
Evolution of Database marketing
Metric

Initial

Optimized

Retention automation

Win by

• Volume

• Content

• Data

Key...
RFM(Customer value)
Recency

Frequency
How often

Monetary Value
Points

Order value

Points

Last purchase

Points

3 mon...
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Kotler Krash Connecting With Customers

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Today companies face their toughest competition ever. Moving from a product and sales philosophy to a holistic marketing philosophy, however. given them a better chance to outperforming the competition. And the cornerstone of a well conceived marketing orientation is strong customer relationship. In this presentation, we discuss how companies can win customers expectations. We also discuss the use of database marketing for customer relationship management

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Kotler Krash Connecting With Customers

  1. 1. Connecting With Customers
  2. 2. What Marketers See Slide 2 of 34
  3. 3. What Customers See Slide 3 of 34
  4. 4. Consumer Thinking Slide 4 of 34
  5. 5. Challenge Slide 5 of 34
  6. 6. Solution Connecting with Customers by Creating Long-Term Loyalty Relationships Slide 6 of 34
  7. 7. Connecting with Customers • How can companies deliver customer value and satisfaction? • What is the lifetime value of a customer, and why is it important to marketers? • How can companies cultivate strong customer relationships? • What is the role of database marketing in customer relationship management? Slide 7 of 34
  8. 8. Connecting with Customers • How can companies deliver customer value and satisfaction? • What is the lifetime value of a customer, and why is it important to marketers? • How can companies cultivate strong customer relationships? • What is the role of database marketing in customer relationship management? Slide 8 of 34
  9. 9. Customer Value and Satisfaction Shifting to a Holistic Marketing approach to deliver Customer Value and Satisfaction Holistic marketing approach: • Inform • Engage • Energize Slide 9 of 34
  10. 10. Traditional Org vs Modern CustomerOriented Org Shifting to a holistic marketing approach to deliver customer value, satisfaction, and loyalty Slide 10 of 34
  11. 11. Delivering Customer Value
  12. 12. Customer Perceived value Total customer benefit Determinants of Customer Perceived Value Total customer cost Product benefit Monetary cost Services benefit Time cost Personal benefit Energy cost Image benefit Psychological cost Slide 12 of 34
  13. 13. Value Concepts Profit Customer Value $6,000 $20,000 -0- 5,000 19,000 $1,000 4,000 18,000 2,000 3,000 Worth to farmer: $20,000 Price 17,000 3,000 2,000 16,000 4,000 1,000 15,000 5,000 -0- 14,000 6,000 Cost to produce: $14,000 Slide 13 of 34
  14. 14. Value Proposition Core positioning: • Safety Other benefits: • Good performance • Design • Environmentally friendly Slide 14 of 34
  15. 15. Satisfaction
  16. 16. Customer Satisfaction Expectations Slide 16 of 34
  17. 17. Customer Expectations Previous purchases Friends advice Marketers’ / competitors Expectations Slide 17 of 34
  18. 18. Monitoring Satisfaction Influence of Customer Satisfaction Measurement Techniques Customer Complaints Slide 18 of 34
  19. 19. Measurement Techniques Customer Loss Rate Surveys Mystery Shopper Slide 19 of 34
  20. 20. Customer Complaints 54% - 70% 5% Buy again if resolved Complain 95% Tell 5 people If resolved quickly 25% Dissatisfied 95% Stop buying Tell 11 people Slide 20 of 34
  21. 21. Product and Service Quality Performance Conformance Quality Satisfaction Profitability Slide 21 of 34
  22. 22. Connecting with Customers • How can companies deliver customer value and satisfaction • What is the lifetime value of a customer, and why is it important to marketers? • How can companies cultivate strong customer relationships? • What is the role of database marketing in customer relationship management? Slide 22 of 34
  23. 23. Maximizing Customer Lifetime Value 20% of Customers 80% of Profits Customers Slide 23 of 34
  24. 24. High Low Potential Value Customer Lifetime Value Cycle Valuable customer Onetime buyer Most Valuable customer Onetime buyer Low High Actual Value Slide 24 of 34
  25. 25. Connecting with Customers • How can companies deliver customer value, satisfaction, and loyalty? • What is the lifetime value of a customer, and why is it important to marketers? • How can companies cultivate strong customer relationships? • What is the role of database marketing in customer relationship management? Slide 25 of 34
  26. 26. Customer Retention Acquiring new customers costs 5x more The average company loses than retaining current customers 10% Of its customers yearly Reducing customer defections by 5% can increase profits from 25% to 85% Slide 26 of 34
  27. 27. Cultivating Customer Relationships Customer Information • Differentiate • Customize • Personalize CRM • Share Slide 27 of 34
  28. 28. Customer Relationship Management (CRM) One-to-One Marketing Customer Empowerment Customer Reviews & Recommendations Slide 28 of 34
  29. 29. One-to-One Marketing 1. Identify prospects and customers 2. Differentiate customers 4. Customize 3. Interact with each customer Slide 29 of 34
  30. 30. Customer Empowerment Energizing customers Brand Evangelists Slide 30 of 34
  31. 31. Customer Reviews and Recommendations Purchase Personal circle influence • Online Ads • Offline Ads Brand identification • Friends • Family • Reviews • Forums • Product comparison Online research Slide 31 of 34
  32. 32. The Marketing Funnel Journey Partner Advocate Supporter Customer Tryer Prospects Slide 32 of 34
  33. 33. Index • How can companies deliver customer value, satisfaction, and loyalty? • What is the lifetime value of a customer, and why is it important to marketers? • How can companies cultivate strong customer relationships? • What is the role of database marketing in customer relationship management? Slide 33 of 34
  34. 34. Databases & Database Marketing Customer databases • Name, address, telephone # • Purchase history • Demographics • Psychographics Data Warehouses Data mining Slide 34 of 34
  35. 35. Evolution of Database marketing Metric Initial Optimized Retention automation Win by • Volume • Content • Data Key Metrics • List size • Send Volume • Open • Clicks • Conversions • Engaged subscriber • Churn ESP selection • Cost • Better Feature sets • • • • Segmentation • None • Available buy • Advanced limited • Purchase history • Automation Automation • None • None • • • • Cost Integration Segmentation Automation Post Purchase triggers Win back campaign Cross promotions Survey Slide 35 of 34
  36. 36. RFM(Customer value) Recency Frequency How often Monetary Value Points Order value Points Last purchase Points 3 months back 5 5 5 100$ 5 6 months back 4 4 4 80$ 4 9 months back 3 3 3 60$ 3 12 months back 2 2 2 40$ 2 15 months back 1 1 1 20$ 1 Customer who purchased a product worth 80$, 12 months back 214 RFM value Slide 36 of 34
  37. 37. Thank you

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