2. Learning Objectives
Basic Marketing Concepts
Understanding customer satisfaction and its
measurement
Having insights on customer loyalty, importance
and benefits
Insights on how to build loyal customers
Understanding customer databases, customer
relationship management and strategies
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3. Kotler on Marketing
It is no longer
enough to
satisfy
customers. You
must delight
them.
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4. The Marketing Concept
• Holds that achieving organizational goals depends on
determining the needs and wants of target markets and
delivering the desired satisfactions more effectively and
efficiently than competitors do.
• Customer focus and value are paths to sales and profits
• The marketing and selling concepts are often confused. The
primary differences are:
• The selling concept takes an “inside-out” perspective
(focuses on existing products and uses heavy promotion
and selling efforts).
• The marketing concept takes an “outside-in” perspective
(focuses on customer needs, values, and satisfaction).
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5. Customer Satisfaction and Loyalty - the Backbone of
Company’s Sales Process
Find customers Win customers Keep customers
Finding Winning Keeping
Its all about finding, winning and keeping customers…
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7. Core Marketing Concept
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Need
Want
Demand
Value &
Satisfaction
Market
Products
Services
Ideas
Transaction &
Relationship
Profitable
Customer
Relationship
Building and maintaining profitable customer relationships by delivering superior
customer value and satisfaction
- Philip Kotler
9. Customer Satisfaction
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What is
customer
satisfaction? • Customer satisfaction (CSAT)
is a measure of how well a
company’s products and
services meet customers’
expectations.
• It reflects your business’
health by showing how well
your products are resonating
with buyers.
10. What is Customer Satisfaction?
Satisfaction represents a veritable key of modeling the acquisition behavior of the
customer, being supported by three groups of variables:
1.Cognitive variables, based on the qualitative superiority of the products given by
the performance.
2.Affective variables, based on the emotions produced to the customers.
3.Conative variables, based on the interaction between the provider and the
customer in the buying act.
Customer satisfaction is an overall customer attitude towards a
service provider, or an emotional reaction to the difference between
what customers anticipate and what they receive, regarding the
fulfillment of some need, goal or desire.
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11. Customer Satisfaction
Satisfaction is a person’s feelings of pleasure or
disappointment that result from comparing a product’s
perceived performance(or outcome) to expectations.
If the performance falls short of expectations, the customer
is dissatisfied.
If it matches expectations , the customer is satisfied.
If it exceeds expectations, the customer is highly satisfied or
delighted.
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12. Customer satisfaction and Product/ Service Quality
Satisfaction will also depend on product and service quality
But what is Quality?
Fitness for use
Conformance to requirements
Freedom from variation
Totality of features and characteristics of a product or
service that bear on its ability to satisfy stated or
implied needs
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14. How do buyers form their expectations
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Past buying experiences
Advice from friends and associates
Marketer’s information and promises
Competitors information and promises
18. 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.
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19. Determinants of
Customer Perceived Value
Image benefit Psychological cost
Personal benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefit Total customer cost
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CPV = TCB- TCC
21. 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 21
24. 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.
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25. Importance of Customer Loyalty
More size of the wallet
High conversion rate
Higher profitability
Less costly
Higher volume and frequency
Resource planning
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26. BENEFITS OF HAVING A LOYAL CUSTOMER
Loyal customers are not actively searching for different
suppliers.
Loyal customers are not open to pitches from competing
companies.
When a customer has brand loyalty, they are not easily
influenced by low price. They are willing to pay more for
the same quality product or service that they are
accustomed to and enjoy.
Loyal customers are open to other goods or services
provided by particular business. 26
27. How to build Customer Loyalty
How to keep customers?
What to do? - What is the problem?
1) Create a Customer
Loyalty Program
2) Referral Program
3) Encourage Customer
Feedback
First things first…
Where is the problem?
Find customers Win customers Keep customers
Finding
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Winning Keeping
29. Types of Customer Loyalty
Behavioral Measures: Customer’s regularity and
frequency of purchases as a sign of loyalty.
Attitudinal Measures: Use of attitudinal data to indicate
the emotional and psychological connection
Composite Measures: Combination of first two
measurements.
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31. Customer Retention – Ways to reduce churn
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Equip staff with better training and tools
Prompt response to customer complaints
Design processes of least resistance
Effective organization structure to address customer
complaints
Provide incentives to effective staff
34. Customer Relationship Management
Process of carefully managing detailed information about
individual customers and all customer “touch points” to maximise
loyalty
A customer “touch point” is any occasion on which a customer
encounters the brand/ product
Actual experience
Personal and mass communication
Casual observation
Companies use information gathered
Personalized marketing
Permission marketing
Customer empowerment
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35. Framework for CRM
• Identify prospects and
customers
• Differentiate customers by
needs and value to company
• Interact to improve
knowledge
• Customize for each
customer
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37. How does CRM Help an Organization?
• Enhance the bottom-line
• Generation of leads
• Increased Referrals
• Customer Support
• Improve Product and Services
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38. 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
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