Customer Value and Satisfaction The Importance of TLC T L C

Marketing is the management of profitable relationships… to attract new customers by promising superior value, and to keep and grow current customers by delivering satisfaction Marketing is a value-creating and value – delivering process The linkage among Benefit-Value-Cost -Satisfaction

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” “If we don’t take care of our customers, someone else will.”

The Importance of TLC T L C

Value and Satisfaction Expectation Performance 810 If performance is lower than expectations, satisfaction is low. If performance is higher than expectations, satisfaction is high. ExpectationPerformance 108

Why is Customer Satisfaction Receiving So Much Attention?

Understand Satisfaction Drivers CustomerSatisfaction Access to products & Services Emotional Factor ServiceQuality Price ProductQuality

Annual Customer Satisfaction Surveys Focus Groups (Fomal/ informal) Online Questionnaires Phone or Fax Surveys Feedback Forms Online Polls Customer Service Feedback CRM Software Different forms of satisfaction measurement

Acquiring new customers cost five times more than the costs involved in satisfying and retaining current customers. The average company loses 10 percent of its customers each year.

Customer Perceived Value Customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.

Wal-Mart Customer Value: Best Price

How Virgin Atlantic Airlines goes about value enhancement? Can be understood from the advertisement message: A customer of VA says: ‘VA picks me up from home,gives me a boarding pass at my car window.I go through straight to the VA lounge.On the flight, I can get my hair cut, my shoes polished, I’m asked how I want my meal, when I want it.When I get off, I don’t have to queue for a taxi in a strange place.’

The SQIP Diamond VALUE Service Price Image Quality Johnson/Weinstein NOVA SOUTHEASTERN UNIVERSITY

Customer-Focused Initiatives Customer Value Attache Nokia product engineer goes on-site with customer for up to 1 month to learn about challenges and show how Nokia can add value Customer Success Engineer Team Centralised group that diagnoses root causes of complex customer problems and implements solutions across business Everyday Life Observation To gain deeper understanding of customer, send video crews & TV cameras into 80 households around world to capture customer daily routines Customer Partner Experience Organisation-wide customer and partner satisfaction index to provide a holistic view of business health and trigger specific corrective actions where necessary.

Premier Dell.com is a special business-oriented part of the Dell Web site that allows customers to interact with Dell and customize all phases of doing business with Dell.

On the Lands’ End Web site, customers can click a button to talk with a customer service representative

The H.O.G. Web site presents the benefits of joining.

An example of personalisation :Amazon.com who, once a user has registered their details and / or made their first purchase steers its repeat book buyers to other types of products according to interests they’ve shown in past purchases Through the use of technology the Web site recognises a user when they return and greets them accordingly

Total quality is the key to value creation and customer satisfaction.

Marketing is the art of attracting and keeping profitable customers. The 80/20 rule states that the top 20 percent of the customers may generate as much as 80 percent of the company’s profits. Suggests amending the rule to read , to reflect the idea that the top 20 percent of customers generate 80 percent of the company’s profits, half of which are lost serving the bottom 30 percent of unprofitable customers. The implication is that a company could improve its profits by “firing” its worst customers.

Task Study about British Airways, how is it customer centric? What is the value chain concept? Explain

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