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Kotler mm 14e_05_ippt_ge

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creating long term loyalty

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Kotler mm 14e_05_ippt_ge

  1. 1. 5 Creating Long-Term Loyalty Relationships 1
  2. 2. Chapter Questions  What are customer value, satisfaction, and loyalty, and how can companies deliver them?  What is the lifetime value of customers and how can marketers maximize it?  How can companies attract and retain customers and cultivate strong customer relationships?  What are the pros and cons of database marketing? Copyright © 2012 Pearson Education 5-2
  3. 3. Harrah’s Builds Relationships Copyright © 2012 Pearson Education 1-3
  4. 4. Figure 5.1 Customer-Orientations Copyright © 2012 Pearson Education 5-4
  5. 5. Dell Reestablished Its Commitment to Value Copyright © 2012 Pearson Education 5-5
  6. 6. What is Customer Perceived Value?  Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Copyright © 2012 Pearson Education 5-6
  7. 7. Figure 5.2 Determinants of Customer Perceived Value Copyright © 2012 Pearson Education 5-7 Image benefit Psychological cost Personal benefit Energy cost Services benefit Time cost Product benefit Monetary cost Total customer benefit Total customer cost
  8. 8. Caterpillar Maximizes Customer Value Copyright © 2012 Pearson Education 5-8
  9. 9. Steps in a Customer Value Analysis  Identify major attributes and benefits that customers value  Assess the qualitative importance of different attributes and benefits  Assess the company’s and competitor’s performances on the different customer values against rated importance  Examine ratings of specific segments  Monitor customer values over time Copyright © 2012 Pearson Education 5-9
  10. 10. Copyright © 2012 Pearson Education 5-10 What is Loyalty? Loyalty is a 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 behavior.
  11. 11. Copyright © 2012 Pearson Education 5-11 Top Brands in Customer Loyalty  Apple iPhone  Clairol  Samsung  Mary Kay  Grey Goose  Clinique  Avis  Wal-Mart  Google  Amazon  Bing  J.Crew  AT&T Wireless  Discover Card  Verizon Wireless  Cheerios
  12. 12. Establishing Value Copyright © 2012 Pearson Education 5-12
  13. 13. Copyright © 2012 Pearson Education 5-13 Measuring Satisfaction  Periodic surveys  Customer loss rate  Mystery shoppers  Monitor competitive performance
  14. 14. Managing Customers Copyright © 2012 Pearson Education 5-14
  15. 15. Copyright © 2012 Pearson Education 5-15 What is Quality? Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
  16. 16. Copyright © 2012 Pearson Education 5-16 Maximizing Customer Lifetime Value Customer Profitability Customer Equity Lifetime Value
  17. 17. Figure 5.3 Customer-Product Profitability Analysis Copyright © 2012 Pearson Education 5-17
  18. 18. Copyright © 2012 Pearson Education 5-18 Estimating Lifetime Value  Annual customer revenue: $500  Average number of loyal years: 20  Company profit margin: 10  Customer lifetime value: $1000
  19. 19. Copyright © 2012 Pearson Education 5-19 What is Customer Relationship Management? CRM is the process of carefully managing detailed information about individual customers and all customer touch points to maximize customer loyalty.
  20. 20. Copyright © 2012 Pearson Education 5-20 Framework for CRM  Identify prospects and customers  Differentiate customers by needs and value to company  Interact to improve knowledge  Customize for each customer
  21. 21. Amy’s Maximized Word of Mouth Copyright © 2012 Pearson Education 5-21
  22. 22. Copyright © 2012 Pearson Education 5-22 Attracting and Retaining Customers  Reduce the rate of defection  Increase longevity  Enhance share of wallet  Terminate low-profit customers  Focus more effort on high-profit customers
  23. 23. Figure 5.4 The Marketing Funnel Copyright © 2012 Pearson Education 5-23
  24. 24. Loyalty Programs Copyright © 2012 Pearson Education 5-24
  25. 25. Database Key Concepts  Customer database  Database marketing  Mailing list  Business database  Data warehouse  Data mining Copyright © 2012 Pearson Education 5-25
  26. 26. Copyright © 2012 Pearson Education 5-26 Using the Database  To identify prospects  To target offers  To deepen loyalty  To reactivate customers  To avoid mistakes
  27. 27. Copyright © 2012 Pearson Education 5-27 Don’t Build a Database When  The product is a once-in-a-lifetime purchase  Customers do not show loyalty  The unit sale is very small  The cost of gathering information is too high
  28. 28. For Review  What are customer value, satisfaction, and loyalty, and how can companies deliver them?  What is the lifetime value of customers and how can marketers maximize it?  How can companies attract and retain customers and cultivate strong customer relationships?  What are the pros and cons of database marketing? Copyright © 2012 Pearson Education 5-28

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