Presentation, CREATING CUSTOMER value, satisfaction and loyalty, help the students to understand core concepts of how to make customer crazy to your products and offerings.

1. CREATING CUSTOMER value, satisfaction and loyalty

2. CREATING CUSTOMER value, satisfaction and loyalty
CONNECTING WITH CUSTOMER
Presented by:
SAYED SAJJAD HUSSAIN SHAH

3. ROADMAP
1. What are customer value, satisfaction, and loyalty,
and how can companies deliver them?
2. What is the lifetime value of customers, and how
can marketers maximize it?
3. How can companies attract and retain the right
customers and
cultivate strong customer relationships?
4. What are the pros and cons of database marketing?

4. Building customer value,
satisfaction and loyalty
 Creating loyal customer is the heart of every business.
 Businesses succeed by getting, keeping and growing customers
 Customer are the only reason to build factories, hire employees etc.

5. Organizational Charts

6. Customer perceived value
 CPV : the prospective consumer’s evaluation of all benefits and the
perceived alternatives.
 Total customer value: the perceived monetary value of the benefit of
economic, functional and psychological benefits.
 Total customer cost: the bundle of costs customers expect to incur in
evaluating, using and disposing

7. Customer perceived value

8. Determinants of Customer
perceived value
Total
Customer
Cost
Customer
Perceived
Value
Total
Customer
Benefit
Product
Benefit
Time Cost
Product
Cost
Service
Benefit
Personnel
Benefit
Psycholog
ical Cost
Image
Benefit
Energy
Cost

9. Customer Value and Satisfaction
 Total Customer Satisfaction
 Satisfaction: feelings of pleasure or disappointment
 Customer Expectations : 12/ 24 hours guarantee
 Delivering High Customer Value
 Value proposition: benefits the company promise such as Volvo -> gaining from
customer experience
 Value-delivery system -> all experiences the customer obtaining and using
 Measuring Satisfaction

10. Total Customer satisfaction

11. Customer Value analysis

13. Tools for Tracking and Measuring Customer Satisfaction
A customer-centered organization makes it easy for customers
to register suggestions and complaints. Some customer-
centered companies-P&G, General Electric, Whirlpool—
establish hot lines with toll-free numbers. Companies are also
using Web sites and
e-mail for quick, two-way communication.
Studies show that although customers are dissatisfied with
one out of every four purchases, less than 5 percent will
complain. Most customers will buy less or switch suppliers.
Responsive companies measure customer satisfaction directly
by conducting periodic surveys. While collecting customer
satisfaction data, it is also useful to ask additional questions to
measure repurchase intention and to measure the likelihood or
willingness to recommend the company and brand to others.
Complaint and
suggestion
systems:
Customer
satisfaction
surveys:

14. Creating Long-term Loyalty Relationships

15. A person’s feelings of
pleasure or
disappointment that
result from comparing
a product’s perceived
performance to (or
outcome) to
expectations.
Satisfaction

18. Customer Satisfaction
Dissatisfied Satisfied Delighted
Expectations

19. Dissatisfied :/

20. Customer Expectations
Expectations
Previous purchases
Friends
advice
Marketers’ / competitors

21. Monitoring Satisfaction
Customer
Complaints
Measurement
Techniques
Influence of
Customer Satisfaction

22. Measurement Techniques
Customer Loss Rate
Mystery Shopper
Surveys

23. Are You Satisfied With Out Customer Service

24. Influence of Customer Satisfaction
Customer satisfaction
Speed of communication

25. Customer Complaints
25%
Dissatisfied
5%
Complain
95%
Stop buying
54% - 70%
Buy again if resolved
95%
If resolved quickly
Tell 5
people
Tell 11
people

26. Complaints

27. Product and Service Quality
Quality
ProfitabilitySatisfaction
Performance Conformance

28. Maximizing Customer Lifetime Value
20% of
Customers
80% of
Profits
Customers

30. Customer Profitability
Customer Lifetime Value
Customer Profitability Analysis
Profitable
Unprofitable

31. A person, household, or company
that over time yields a revenue
stream exceeding by an acceptable
amount the company’s cost stream
for attracting, selling, and serving
that customer.
A Profitable Customer

32. Customer-Product
Profitability Analysis

33. CRM Strategies
To Increase The Value Of Customer Base
Reduce the rate of defection
Increase longevity
Enhance “share of wallet”
Terminate low-profit
customers
Focus more effort on
high-profit customers

34. Customer Retention
 Acquisition of customers can cost five times more
than retaining current customers.
 The average customer loses 10% of its customers each
year.
 A 5% reduction to the customer defection rate can
increase profits by 25% to 85%.
 The customer profit rate increases over the life of a
retained customer.

35. The Customer
Development Process
Prospects
Suspects
Disqualified
First-time
customers
Repeat
customers Clients Members
Partners
Ex-customers

36. Using the Database
To identify prospects
To target offers
To deepen loyalty
To reactivate customers
To avoid mistakes

37. Estimating Lifetime Value
 Annual customer revenue: $500
 Average number of loyal years: 20
 Company profit margin: 10
 Customer lifetime value: $1000

38. Steps for Creating
Customer Evangelists
 Customer plus-delta
 Napsterize your knowledge
 Build the buzz
 Create community
 Make bite-size chunks
 Create a cause

39. Database Key Concepts
 Customer database
 Database marketing
 Mailing list
 Business database
 Data warehouse
 Data mining

40. 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