1. Creating Customer Value, Satisfaction, and Loyalty5
Creating Customer Value, Satisfaction, and Loyalty
Marketing Management, 13th ed

2. Figure 5.1 Organizational Charts
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3. Figure 5.2 Determinants of Customer Perceived Value
Total customer benefit
Total customer cost
Product benefit
Monetary cost
Services benefit
Time cost
Personal benefit
Energy cost
Image benefit
Psychological cost
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4. What is Loyalty?
Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.
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5. The Value Proposition The whole cluster of benefits the
company promises
to deliver
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6. Measuring Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive Performance
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7. J.D. Power Rates Customer Satisfaction
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8. What is Quality? Quality is the totality of features and
characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.
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9. Maximizing Customer Lifetime Value
Profitability
Customer
Equity
Lifetime
Value
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10. Estimating Lifetime Value
Annual customer revenue: $500
Average number of loyal years: 20
Company profit margin: 10
Customer lifetime value: $1000
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11. What is Customer Relationship Management?
CRM is the process of carefully managing detailed information about individual customers and all customer touchpoints to maximize customer loyalty.
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12. Framework for CRM Identify prospects and customers
Differentiate customers by needs
and value to company
Interact to improve knowledge
Customize for each customer
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13. CRM Strategies Reduce the rate of defection Increase longevity
Enhance “share of wallet”
Terminate low-profit customers
Focus more effort on high-profit customers
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14. 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.
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15. Figure 5.5 The Customer Development Process
Suspects
Prospects
Disqualified
First-time
customers
Repeat
customers
Clients
Members
Partners
Ex-customers
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16. Creating Customer Evangelists
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17. Database Key Concepts Customer database Database marketing
Mailing list
Business database
Data warehouse
Data mining
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18. To reactivate customers
Using the Database
To identify prospects
To target offers
To deepen loyalty
To reactivate customers
To avoid mistakes
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