Description
Customer relationship management (CRM) is a model for managing a company’s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.
Building Customer Satisfaction, Value, and Retention
PowerPoint by Karen E. James Louisiana State University - Shreveport
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 0 of 18
Objectives
? Understand how companies deliver customer value and satisfaction.
? Identify the factors that make a high performance business.
? Understand how companies attract and retain customers.
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 1 of 18
Objectives
? Realize how companies can improve both customer and company profitability.
? Understand how companies can deliver total quality.
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 2 of 18
Customer Value
? Customers seek to maximize value by
– estimating which offer (product/firm) delivers the most value (CPV) – forming an expectation of value and acting upon it (purchase) – evaluating their usage experience against the expectations
? Satisfaction results when expectations are equaled or surpassed
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 3 of 18
Customer Perceived Value
? Perception of delivered value is a function of:
– Total customer costs – Total customer value
? Firms at a disadvantage must:
– Reduce perceptions of costs or enhance perceptions of value
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 4 of 18
Customer Satisfaction
? Satisfaction is defined as . . .
“a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.”
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 5 of 18
Customer Satisfaction
? To maximize satisfaction . . .
– Don’t exaggerate the product / service’s capabilities in advertising or other communications
? Dissatisfaction
will result ? FTC may become involved
– Don’t set expectations too low
? Market
©2003 Prentice Hall, Inc.
size will be limited
Slide 6 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? Identify several stakeholder groups for your University
? How might the needs of these groups conflict with each other?
Slide 7 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? New product development
? Customer attraction and retention ? Order fulfillment ? Reengineering work flows ? Building cross functional teams
Slide 8 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? Resources include labor, materials, machines, energy, and information
? Outsourcing vs. ownership: Own and nurture core competencies
Slide 9 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? Organization refers to the organization’s policies, structures, and corporate culture
? Corporate culture: shared experiences, stories, beliefs, and norms within an organization
Slide 10 of 18
To accompany A Framework for Marketing Management, 2nd Edition
Core Business Practices
? Market Sensing
? Customer Acquisition
? Customer Relationship Management
? Fulfillment Management ? New Offering Realization
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 11 of 18
Customer Retention
? Reducing customer churn (defection) is highly desirable
– Define and measure retention rate – Identify causes of attrition – Estimate profit lost from customer defection (customer lifetime value) – Estimate cost to reduce defection; take appropriate action
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 12 of 18
Drivers of Customer Equity
? Brand Equity
? Relationship Equity
? Value Equity
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 13 of 18
Strong Customer Bonds
Keys to Success
? Adding Financial Benefits ? Adding Social Benefits ? Adding Structural Ties
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 14 of 18
? Frequency programs
? Club memberships
Strong Customer Bonds
Keys to Success
? Adding Financial Benefits
? Adding Social Benefits ? Adding Structural Ties
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 15 of 18
? Personalize customer relationships
Strong Customer Bonds
Keys to Success
? Adding Financial Benefits
? Adding Social Benefits ? Adding Structural Tie
©2003 Prentice Hall, Inc.
? Create long-term contracts
? Charge less for ongoing purchases
? Link product to long-term service
Slide 16 of 18
To accompany A Framework for Marketing Management, 2nd Edition
20 – 80 – 30 Rule
20 20% of your customers 80 Generate 80% of your profit 30 Half of your profit is lost
serving the bottom 30% of your customer base
Slide 17 of 18 ©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition
doc_505552417.ppt
Customer relationship management (CRM) is a model for managing a company’s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.
Building Customer Satisfaction, Value, and Retention
PowerPoint by Karen E. James Louisiana State University - Shreveport
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 0 of 18
Objectives
? Understand how companies deliver customer value and satisfaction.
? Identify the factors that make a high performance business.
? Understand how companies attract and retain customers.
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 1 of 18
Objectives
? Realize how companies can improve both customer and company profitability.
? Understand how companies can deliver total quality.
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 2 of 18
Customer Value
? Customers seek to maximize value by
– estimating which offer (product/firm) delivers the most value (CPV) – forming an expectation of value and acting upon it (purchase) – evaluating their usage experience against the expectations
? Satisfaction results when expectations are equaled or surpassed
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 3 of 18
Customer Perceived Value
? Perception of delivered value is a function of:
– Total customer costs – Total customer value
? Firms at a disadvantage must:
– Reduce perceptions of costs or enhance perceptions of value
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 4 of 18
Customer Satisfaction
? Satisfaction is defined as . . .
“a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.”
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 5 of 18
Customer Satisfaction
? To maximize satisfaction . . .
– Don’t exaggerate the product / service’s capabilities in advertising or other communications
? Dissatisfaction
will result ? FTC may become involved
– Don’t set expectations too low
? Market
©2003 Prentice Hall, Inc.
size will be limited
Slide 6 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? Identify several stakeholder groups for your University
? How might the needs of these groups conflict with each other?
Slide 7 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? New product development
? Customer attraction and retention ? Order fulfillment ? Reengineering work flows ? Building cross functional teams
Slide 8 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? Resources include labor, materials, machines, energy, and information
? Outsourcing vs. ownership: Own and nurture core competencies
Slide 9 of 18
To accompany A Framework for Marketing Management, 2nd Edition
High Performance Businesses
Keys to Success
? Stakeholders ? Processes ? Resources ? Organization
©2003 Prentice Hall, Inc.
? Organization refers to the organization’s policies, structures, and corporate culture
? Corporate culture: shared experiences, stories, beliefs, and norms within an organization
Slide 10 of 18
To accompany A Framework for Marketing Management, 2nd Edition
Core Business Practices
? Market Sensing
? Customer Acquisition
? Customer Relationship Management
? Fulfillment Management ? New Offering Realization
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 11 of 18
Customer Retention
? Reducing customer churn (defection) is highly desirable
– Define and measure retention rate – Identify causes of attrition – Estimate profit lost from customer defection (customer lifetime value) – Estimate cost to reduce defection; take appropriate action
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 12 of 18
Drivers of Customer Equity
? Brand Equity
? Relationship Equity
? Value Equity
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 13 of 18
Strong Customer Bonds
Keys to Success
? Adding Financial Benefits ? Adding Social Benefits ? Adding Structural Ties
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 14 of 18
? Frequency programs
? Club memberships
Strong Customer Bonds
Keys to Success
? Adding Financial Benefits
? Adding Social Benefits ? Adding Structural Ties
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 15 of 18
? Personalize customer relationships
Strong Customer Bonds
Keys to Success
? Adding Financial Benefits
? Adding Social Benefits ? Adding Structural Tie
©2003 Prentice Hall, Inc.
? Create long-term contracts
? Charge less for ongoing purchases
? Link product to long-term service
Slide 16 of 18
To accompany A Framework for Marketing Management, 2nd Edition
20 – 80 – 30 Rule
20 20% of your customers 80 Generate 80% of your profit 30 Half of your profit is lost
serving the bottom 30% of your customer base
Slide 17 of 18 ©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition
doc_505552417.ppt