GLOBAL MARKETING CUSTOMER RELATIONSHIP MANAGEMENT

Satisfaction Theory (E) Expectations (S) Satisfaction(D) Disconfirmation (P) Performance + / Source: Churchill & Surprenant 1982; Oliver 1997

Implications of Theory When P > E, there is positive disconfirmation, or satisfaction When E > P, there is negative disconfirmation, or dissatisfaction Managerial implication: decrease consumers’ expectations

What else do we know about satisfaction? Critical to developing customer loyalty and retention Poorly measured Anything other than complete satisfaction is not enough

What’s the answer? Listening to customers Focus on retention/defection Develop customer relationships

Lifetime Customer Value Multiply a customer’s expected # of visits times the average amount of money spent per visit. Deduct costs of acquiring and servicing. Add in value of accounts the customer refers to you. Discount the sum appropriately for the time period being analyzed.

Share of Customer What’s the opportunity for increasing lifetime value by offering the customer more than you offer now? Divide current estimated lifetime value by estimated potential lifetime value

Building Relationships What are successful relationships built on? What kind of relationship will be most beneficial to firms?

Relationship Spectrum Transactional exchanges Value-adding exchanges Collaborative exchanges

Levels on Which Relationships are Formed Consumer-Product Bonds Consumer-Consumer Bonds Consumer-Firm Bonds Consumer-Brand Bonds

Who Needs CRM? I III IV II Airlines Packaged Goods Mfrs Gas Stations Pharmacies Computer Systems Cos. Bookstores Uniform Highly differentiated CUSTOMER NEED Uniform Highly differentiated CUSTOMER VALUATIONS

Devising a Relationship Strategy Create a database of customer knowledge

Create a database of customer knowledge Analyze reasons for loyalty and defection

Create a database of customer knowledge Select customers to attract and retain Analyze reasons for loyalty and defection

Create a database of customer knowledge Design and implement programs focused on customer retention Select customers to target and retain Analyze reasons for defection and loyalty

Create a database of customer knowledge Monitor performance for continuous improvement Design and implement program focused on customer retention Select customers to target and retain Analyze reasons for loyalty and defection