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Chapter 5 Building Customer Satisfaction, Value and Retention and Loyalty

Chapter 5 Building Customer Satisfaction, Value and Retention and Loyalty. What is a Customer?. “The customer is value-maximizer, within the bounds of search costs and limited knowledge, mobility and income.”. What is needed by the Customer? . Value. Satisfaction. Retention. Customer Value.

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Chapter 5 Building Customer Satisfaction, Value and Retention and Loyalty

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  1. Chapter 5Building Customer Satisfaction, Value and Retention and Loyalty

  2. What is a Customer? “The customer is value-maximizer, within the bounds of search costs and limited knowledge, mobility and income.”

  3. What is needed by the Customer? • Value • Satisfaction • Retention

  4. Customer Value

  5. Customer Value “ Is the bundle of benefits expected” Customer Delivered Value = Total Customer Value - Total Customer Cost Customer Cost “ Is the bundle of costs expected” • What is Customer Delivered Value?

  6. Product Value Money Cost Time Cost Service Value Energy Cost Personnel Value Psychic cost Image Value Customer Delivered Value Total Customer Value Total Customer Cost Determinants of Customer Delivered Value

  7. What are the factors that may hinder or stop the full implementation of the Customer Delivered Value System? • The buyer might be under orders to buy at the lowest cost. • Concentrating on the short-term benefits and over looking long term costs. • The effect of the Relation between the sales persons and the consumer.

  8. Customer Satisfaction

  9. What is Satisfaction? • It is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. Satisfaction = function (perceived performance /expectations)

  10. What are the tools for tracking and measuring Customer Satisfaction • Complaint and Suggestion system • Customer Satisfaction Surveys • Ghost Shopping • Lost Customers Analysis

  11. Attracting and Retaining Customers

  12. Benefits of Highly Satisfied Customer • Stays Loyal Longer • Buys more • Talks favorably about the company • Offer products and services ideas to the company • Costs less to serve than new customer

  13. Why retain Customers? • Acquiring a new customer costs 5 times retaining an old one. • The average company loss about 10% of its customers annually • Customer rate increase with time.

  14. What are the types of marketing? • Basic Marketing: selling the product • Reactive Marketing: selling the product and encouraging further contact • Accountable Marketing: Follow up on Customers satisfaction. • Proactive marketing: involving customers in product and company improvements • Partnership marketing: encouraging the customer to become a stakeholder in the company

  15. Tools to improving the marketing impact • Adding financial benefits • Adding social benefits • Individualizing and personalizing customer relationship

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