1. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 10 Encouraging Customer Loyalty

2. 10-2 Learning Objectives  Establish and maintain trust with customers  Relate the role of customer and brand loyalty to organizational success  Explain customer relationship management and explain its importance to quality service  Develop the service provider characteristics that will enhance customer loyalty

3. 10-3 Learning Objectives  Describe the provider’s responsibility for establishing and maintaining positive customer relationships  Identify strategies that can be used to make customers feel like they are number one  Discuss strategies that can enhance customer satisfaction  Define quality service

4. 10-4 Role of Trust  Key element in cementing interpersonal relationships  For trust to develop, customer must believe that you and your organization:  Have the customer’s best interests in mind  Are honest and forthcoming with customers  Strive to deliver the best products and services  Will promptly and efficiently take care of any hitches, if they occur

5. 10-5 Trust-Building Strategies  Communicate effectively and convincingly  Display caring and concern  Be fair  Admit errors or lack of knowledge  Trust your customers  Keep your word  Provide peace of mind

6. 10-6 Trust-Building Strategies  Be responsible for your customer relationships  Personalize your approach  Keep an open mind  Individualize service  Show respect  Elicit customer input

7. 10-7 Customer Information-Gathering Techniques Customer comment cards Toll-free numbers Verbal comments Follow-up telephone surveys Service contact surveys Automated surveys Exit interviews Shopper/cust omer surveys Focus groups Sales and service records

8. 10-8 Customer Loyalty  Customers return to a product or organization regularly because of the service and satisfaction they receive  Touch points provide an opportunity to influence customer loyalty and enhance customer relationship  Loyalty or rewards programs help strengthen customer loyalty

9. 10-9 Customer Relationship Management  Identifying customer needs and understanding and influencing customer behavior through ongoing communication strategies  To acquire, retain, and satisfy the customer  Components in the CRM process  Operational  Collaborative  Web pages and automated voice response, or AVR, systems  Analytical

10. 10-10 Customer Relationship Management  Customer retention is crucial for the survival of the organization  High churn rate is an indicator of:  Customer dissatisfaction  Better targeted marketing and sales efforts  Better or cheaper pricing by competitors  Factors related to service provider relationships with customers

11. 10-11 Customer Relationship Management  Strategies adopted by:  Large organizations  Implementation of customer loyalty programs  Small organizations  Building relationships with their customers on an interpersonal level

12. 10-12 Benefits of Customer Relationship Management  Repeat and referral business  Less need to obtain new customers  Reduced marketing costs  Increased return on investment (ROI)  Enhanced customer loyalty  Elevated profitability  Ability to engage in targeted marketing

13. 10-13 Figure 10.2 - Loyalty Equation

14. 10-14 Channel Partner  Relationship of two organizations through which partners are able to build a larger and stronger competitive presence in the market  Types  Transactional or indirect  Tactical  Strategic

15. 10-15 Provider Characteristics Affecting Customer Loyalty ResponsivenessAdaptability Communication skills Decisiveness EnthusiasmEthical behavior

16. 10-16 Provider Characteristics Affecting Customer Loyalty InitiativeKnowledge PerceptivenessPlanning ability Problem-solving ability Professionalism

17. 10-17 Figure 10.6 - Planning Process Model

18. 10-18 Making the Customer Number One  Regard moment of truth or contact points as opportunities to provide excellent service  Make positive initial contact  Establish rapport  Identify and satisfy customer needs quickly  Exceed expectations  Follow up

19. 10-19 Relationship-Rating Point Scale Service is out of the ordinary and unexpected Exemplary (4) Service is beyond normal and may pleasantly surprise customer Above Average (3) Service is what is expected by a customer Average (2) Service is not as expected and disappoints customers Below Average (1) Service is unacceptable and leads to a breakdown in the customer–provider relationship Unsatisfactory (0)

20. 10-20 Tips to Provide Quality Service to Customers  Pay attention  Deal with one customer at a time  Know your customers  Give customers special treatment  Service each customer at least adequately

21. 10-21 Tips to Provide Quality Service to Customers  Do the unexpected  Handle complaints effectively  Sell benefits, not features  Know your competition

22. 10-22 Strive for Quality  Total quality management (TQM) and continuous quality improvement (CQI): Systematic approaches to identifying and quantifying best practices in an organization and/or industry in order to make improvements in effectiveness and efficiency