1. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 1 Chapter Five Building customer service relationships

2. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 2 Lifetime Value of Customer Holding customers for measurable periods of time May lose money on first sale (acquisition costs) Use spreadsheets to sort segments Develop product scores Take care not to over-specify

3. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 3 Back End Marketing Internal tasks that ensure smooth customer relationships Some objectives are to: Qualify prospects Convert prospects to loyal clients Segment client base Reassure clients of wise purchase decisions Good service and maintenance of relationships Ensure continued sales to new customers Increase size or profitability of orders Need for speed to ensure competitive advantage

4. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 4 Increase Contact Profitability Two-step promotions Reassurance Convert order into additional sales –Send extra order forms –Accessories and related items –Upgraded items from the line –Incentives for referrals –Package and statement inserts –Offering items from other sources of supply –Loading up customers

5. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 5 Tactics for Longer-Term Relationships Continuity offers The negative option Preferred customer discount clubs Preferred customer deals Loyalty schemes Follow up contacts

6. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 6 Service Encounters are Moments of Truth (a) Anything bought has both physical & service elements Purchases consist of a chain of service encounters We all appreciate flexible, personalised service Good service is the starting point in relationship building We all like to do business with those that treat us like individuals We all like to deal with people not machines! Nothing puts people off faster than having their inquiry handed from person to person

7. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 7 Service Encounters are Moments of Truth (b) What kind of relationship do customers want Different people want differing degrees –Some consider extra information junk mail –Some want one way information –Some want to interact Three levels of relationship marketing efforts –Trying to build loyalty programs –Creating some social relationship –Some involve closer contact and problem solving

8. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 8 Service Encounters are Moments of Truth (c) It has to be a WIN–WIN situation You build bonds with continuous two way communication Once they bond encourage them to share their experiences with others

9. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 9 Order Processing & Fulfilment (a) Order processing Order preparation –Order form issues Order transmission Order entry Order filling Order tracking and status reporting

10. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 10 Order Processing & Fulfilment (b) Inventory issues Business to business mostly higher stock levels Business to consumer may run at lower levels Procurement costs Carrying costs Out of stock costs

11. Copyright ©2000 McGraw-Hill Book Co Aust Pty Ltd PPT t/a Direct Marketing by Power, Balderstone & Gyles 11 Order Processing & Fulfilment (c) Warehousing basics Receiving and storage Order picking Some warehouses highly automated Use of outside contractors Specialist firms Factors to consider