Creating customer value, satisfaction & loyalty
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The document discusses 10 key concepts for creating customer value, satisfaction, and loyalty. It emphasizes meeting customer perceived value by satisfying their benefits and costs. Maintaining high satisfaction leads to loyalty. Companies should focus on retaining existing customers rather than acquiring new ones since retention is more cost effective. Maintaining good customer relationships through databases allows companies to better target customers, deepen loyalty, and avoid mistakes.
Creating customer value, satisfaction & loyalty
- 1. Top 10 Concepts Ch 5 and Creating Customer Value, Satisfaction & Loyalty Joan Soliven April 8, 2011 http://joansoliven.blogspot.com/
- 2. Outline 1. Customer Perceived Value 2. Customer Satisfaction 3. Quality 4. Maximize Customer Lifetime Value 5. Customer Relationship Management 6. Increase Value of Customer http://joansoliven.blogspot.com/
- 3. Outline 7. Customer Development Process 8. Customer Retention 9. Customer Loyalty 10. Database http://joansoliven.blogspot.com/
- 4. Customer Perceived Value Difference between what the customer gets and what he or she gives for different possible choices. http://joansoliven.blogspot.com/
- 5. Consumers are more educated and informed, they seek out superior alternatives Dell offering better service than HP, they beginning to outpace Dell in terms of customer perceived value
- 6. Successful Companies follow the Modern Customer-oriented Org. Chart Customers Front-line people Middle Management Top Management http://joansoliven.blogspot.com/
- 7. Everyone in the company has their own role that aims to satisfy the customer meet serve and satisfy customers support the frontline people Hire and support good middle Managers http://joansoliven.blogspot.com/
- 8. What do customer perceived as valuable? Image Psychological Personnel Energy Services Time Products Monetary Total Customer Benefit Total Customer Cost http://joansoliven.blogspot.com/
- 9. 5 steps to determine Customer Value Identify major attributes and benefits that customer value Assess the importance of different attributes and benefits Assess the company’s and competitor’s performance Examine ratings of specific segments Monitor customer values over time http://joansoliven.blogspot.com/
- 10. Companies that are Good in Delivering Customer Value http://joansoliven.blogspot.com/
- 11. 2. Customer Satisfaction The feeling of satisfaction or dissatisfaction of the customer from a product’s outcome versus customer’s expectation. http://joansoliven.blogspot.com/
- 12. Measurement for Customer Satisfaction Periodic Surveys Customer Loss Rate Mystery Shoppers Monitor Competitive Performance http://joansoliven.blogspot.com/
- 13. Measurement for Customer Satisfaction Periodic Surveys Customer Loss Mystery Monitor Rate Shopper Competitive -Track customer satisfaction - experience Performance -To find out why they stop buying company’s - find out the customer & competitor’s Satisfaction rate of Products & service Competitors. http://joansoliven.blogspot.com/
- 14. 3. Customer Satisfaction depends on Quality Quality is the totality of features and characteristics of a product or service that bear of its ability to satisfy needs. http://joansoliven.blogspot.com/
- 15. Impact of Quality These 3 are interrelated with each other Product and Service Quality Company Customer Profitability Satisfaction http://joansoliven.blogspot.com/
- 16. 4. Maximize Customer Lifetime Value Customer Profitability Customer Lifetime Equity Value http://joansoliven.blogspot.com/
- 17. Customer Profitability in relation to 80-20 or 150-20 Rule 20% of the customer often generates 80% or more of the company’s profits. 20% most profitable customers generate as much as 150% of the profits of a company; the 20% least profitable lose 100% of the profits. http://joansoliven.blogspot.com/
- 18. 5. Customer Relationship Management The process of carefully managing detailed information about individual customers and all customer ”touch points” to maximize customer loyalty. http://joansoliven.blogspot.com/
- 19. Excellent Real-time Customer Service through the effective use of information Market offerings Services Programs Messages Media
- 20. Maximize Costumer Loyalty through Customer Relationship Mgmt by: Identifying your prospects and customers Differentiating customers by their needs and their value to company Interacting with customers Customizing for each customer. http://joansoliven.blogspot.com/
- 21. 6. Increasing Value of Customer Base by: Reduce the rate of Terminate low-profit defection customers Increase longevity of relationship Focus more effort on high profit customers Enhance ”share of wallet” http://joansoliven.blogspot.com/
- 22. How does Customer Value Works? Reduce the rate of defection = Knowledgeable employees to answer customer satisfactorily Increase longevity of relationship = Treat customers as partners Enhance ”share of wallet” = Increase sales by providing new offerings An opportunities. http://joansoliven.blogspot.com/
- 23. 7.Customer Development Process Inactive or Ex-customers First-time Potentials customers Clients Advocates Prospects Repeat Members Partners Customers http://joansoliven.blogspot.com/
- 24. Behavior of Customer in the Customer-Development Process Potentials – interested Prospects – motivated First-time & repeat customers – needs to be encourage through marketing efforts First-time Potentials customers Clients Advocates Prospects Repeat Members Partners Customers http://joansoliven.blogspot.com/
- 25. Behavior of Customer in the Customer-Development Process Clients - needs to be treated special Members – enjoying the benefits Advocates – recommending the product Partners First-time Potentials customers Clients Advocates Prospects Repeat Members Partners Customers http://joansoliven.blogspot.com/
- 26. 8. Maintaining Customer is better than Acquiring Customer Acquiring customers can cost 5X more than retaining them. The average customer loses 10% of its customer each year. A 5% reduction to the customer defection rate can increase profits by 25% to 75%. The customer profit rate increases over the life of a retained customer. http://joansoliven.blogspot.com/
- 27. 10. Five Ways in Using Database To identify prospects To target offers To deepen loyalty To reactive customers To avoid mistakes http://joansoliven.blogspot.com/
- 28. Summary The company should meet the customer perceived value in order to satisfy the total customer benefits and total customer cost. The company should constantly evaluate if the costumer needs & wants are met High satisfaction leads to high customer loyalty. Maintaining customer is easier than acquiring new costumer. http://joansoliven.blogspot.com/
- 29. Conclusion The heart of satisfying and maintaining customer is to meet their expectations on the product/services and create good relationship thus creates customer loyalty. http://joansoliven.blogspot.com/
- 30. Thank you! Ch 5 and Creating Customer Value, Satisfaction & Loyalty Joan Soliven April 8, 2011 http://joansoliven.blogspot.com/
Editor's Notes
- #6: At the top are customers; next in importance are frontline people who meet, serve, and satisfy customers; under them are the middle managers, whose job is to support the frontline people so they can serve customers well; and at the base is the top management, whose job is to hire and support good middle managers.
- #14: The implication is that a company could improve its profitability by “firing” its worst customers