Ensuring Total Customer Satisfaction and Managing Customer Relationships

1. 6 Ensuring Total Customer Satisfaction and Managing Customer Relationships

2. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Objectives 1. Explain the importance of striving for total customer satisfaction in marketing planning and implementation. 2. Explain the concept of value and the importance of creating value for customers. 3. Illustrate the concept of Lifetime-Customer Value. 4. Outline and explain the value-adding chain. 5. Explain the concept of bench marking and its application in producing customer satisfaction and company competitiveness. 6. Explain the important features of customer relationship marketing and how it is applied. 7. Explain the concept of performance gap analysis. 8. Outline the steps involved in a marketing effectiveness audit. 6-1

3. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Total Customer Satisfaction • Providing a good or service that fully and without reservation conforms to the customer’s requirements. 6-2

4. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Lifetime-Customer Value (LCV) • The sum of all future-customer revenue streams minus product and servicing costs, acquisition costs, and marketing costs. 6-3

5. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Figure 6.1 Lifetime-Customer Value Development Investment phase Recoup costs Increasing profit + Relationship building Business expansion Reordering, Loyalty generation _ Stranger Prospect Customer Repeat customer Loyal, lifetime customer 6-4

6. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Figure 6.2 An LCV Approach to Marketing Management Marketing Management (LCV orientation) Customer management Marketing mix management • Products • Pricing • Marketing • Communications • Distribution • Acquisition • Retention • Add-on selling 6-5

7. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Figure 6.3 Customer-Based Intangible Resources: Development Paths and Company Value Organizational and Marketing Knowledge Reputation Image Customer Satisfaction Trust Marketing Management (LCV orientation) Loyalty Relationship Organizational and Marketing Knowledge 6-6

8. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Value • A subjective term that is defined by the customer; part of customer expectations, which are a combination of cost, time, quantity, quality, and human factors. 6-7

9. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Market Challenges for Providing Value • Escalating customer expectations • Competitive forces • Cost pressures 6-8

10. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Figure 6.4 The Value-Adding Chain SYSTEMS Operating, Administrative control, and reward CULTURE Norms, values, rituals, and relationships PERFORMANCE Employee Behaviour RESULTS Quality, productivity, and service outcomes VALUE Customer satisfaction and competitive advantage 6-9

11. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Table 6.1 Customer’s Views of Value Leaders (1 of 2) Operational Excellence “They provide a great deal” • excellent/attractive price • minimum acquisition cost and hassle • lowest overall cost of ownership “A no-hassles firm” • convenient • consistent quality Performance Superiority “They’re the most innovative” “Constantly renewing and creative” “Always at the leading edge” 6-10a

12. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Table 6.1 Customer’s Views of Value Leaders (2 of 2) Customer Responsiveness “Exactly what I need” • customized products • personalized communication “They’re very responsive” • handling of exceptions • inducing/building relationships 6-10b

13. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Benchmarking • The comparison of performance with industry best practices. 6-11

14. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Requirements for Using Benchmarking as a Tool 1. Know your operation. 2. Know the industry leaders and competitors. 3. Incorporate the best. 4. Develop superiority. 6-12

15. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships The Five Stages in the Benchmarking Process 1. Planning 2. Analysis 3. Integration 4. Action 5. Maturity 6-13

16. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Performance Gap • The difference between the company’s performance and that of the best of the best. 6-14

17. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Marketing Audit • A comprehensive appraisal of the organizations marketing activities. It involves a systematic assessment of marketing plans, objectives, strategies, programs, activities, organizational structure, and personnel. 6-15

18. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Customer Relationship Marketing (CRM) • Identifying and establishing, maintaining and enhancing, and, when necessary, also terminating relationships with customers and other stakeholders, at a profit, so that the objectives of all parties are met, through a mutual exchange and fulfillment of promises. 6-16

19. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Customer Satisfaction Management (CSM) • A program that focuses on identifying key performance areas to meet or exceed the average customer’s expectations. 6-17

20. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Database Marketing • Creation of a marketing plan based on the use of database technology to define the characteristics and needs of customers. 6-18

21. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships CRM Software • Software designed to analyze a customer database and determine customer needs and characteristics. 6-19

22. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Table 6.3 A Relationship View of Marketing 6-20

23. 6 Ensuring Total Customer Satisfaction & Managing Customer Relationships Mass Customization • Organizing to make production of products more flexible to meet specifically stated customer requirements. 6-21

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