Building Customer Satisfaction, Value, and Retention by

Kotler on Marketing It is no longer enough to satisfy customers. You must delight them.

Traditional Organization Chart Top Management Middle Management Front-line people Customers

Customer-Oriented Organization Chart Customers Front-line people Customers Middle management Top manage- ment 1-4 4

Customer Perceived Value Customers tend to be value maximizers , within the bounds of search costs and limited knowledge, mobility, and income. Customer perceived value is the difference between the prospective customer’s evaluation of all benefits and all the costs of an offering and the perceived alternatives 1-5 5

Customer Perceived Value Image value Personnel value Services value Product value Total customer value Customer delivered value Monetary cost Time cost Energy cost Psychic cost Total customer cost 1-6 6

Customer Satisfaction A company would be wise to measure customer satisfaction regularly because one key to customer retention is customer satisfaction. Methods: Customer loss rate Mystery shoppers Competitor’s performance (Their satisfaction rate) Product and service quality

Customer Relationship Management Process of managing detailed information about individual customers and carefully managing all customer “touch points” to maximize customer loyalty. Touch point: Any occasion on which a customer encounters the brand and product – from actual experience to personal or mass communications to casual observation. Customer touch point for hotel ? For airline? 1-8 8