Post on 18-Aug-2015
Cultivating Customer Relationship
Successful use customer information to build strong long-term relationship.
Companies need to keep a check on the customer satisfaction…
Internet allowed marketers to abandon old mass market practices and
formulate new personalized marketing.
Personalizing the market is making sure brand and its market are relevant to the customers
A Challenge, given no two customers are identical
To adapt to customer’s desire for personalization, marketers embraced ideas of permission and one-one marketing
Customer may be nameless but
clients cannot be… Thoughtful companies
turn their customers to clients.
Permission marketing-
Marketing only after getting expressedpermission of the customer
Permission marketing-
Marketing only after getting expressedpermission of the customer
But, many a times
customers may have
conflicting needs or
undefined or ambiguous
preferences.
Permission marketing-
Marketing only after getting expressedpermission of the customer
But, many a times
customers may have
conflicting needs or
undefined or ambiguous
preferences.
• Identify your prospects and customers
• Differentiate them in terms of • Value to company
• Their needs
• Interact with customers and to know their needs
• Customize the product to each customer
Customers play a key role in setting direction of the brand and deciding on how it is marketed
“ Power is with the consumer and marketers and
retailers are scrambling to keep up with her. Consumers are beginning in a very real sense to own our brand and participate in their creation.
We need to learn to let go.“- A.G Lafley
Former Chairman, P&G
With increasing mistrust
of some advertising,
online customer ratings
and reviews are playing
vital role for internet
retailers such as
Amazon and Ebay
Negative reviews also can
be helpful, as consumer
can better learn the
advantage and
disadvantage through
negative reviews, resulting
fewer product return,
cutting on cost
Companies seeking to
expand their profit and sales :
• Develop ads and place
them in media
• Send direct emails to
possible new prospects
• Send salespeople to
participate in tradeshows
where they might get new
leads
• Purchase names from list
brokers etc…
Its not enough to attract new
customers; the company must also
keep them and increase business.
To o many company
suffer from
customer churn off or
defection. Adding
customers here is like
adding water to a leaky
bucket.
To reduce customer churn off
companies must :
• Define and measure retention rate
• Distinguish the causes of customer attrition
and manage them
• Compare the lost customer’s life time value
to cost of reducing defection.
spend money on retaining customer only if :
Lose profit > retention cost
Market funnel identifies the potential target
market at each stage in the decision process, from merely
aware to highly loyal
Target Market
Aware Open to trial
Recent user
Regular user
Most often used
Loyal Trier
The percentage of customers going from one stage to the next
in the funnel allows markets to identify any barriers in building a
loyal customer franchise
RETENTION
DYNAMICS
Interesting numbers:
Acquiring new customer can cost 5 times as retaining
current ones Average company loses 10% customers every year 5% reduction in defection
rate can increase profit up to 85%
Profit rate tend to increase over the customer lifetime due to increased purchases ,referrals ,reduced operating costs to services
Satisfied customers are company’s customer capital
A key driver of
shareholder value is
aggregate value of the
customer base.
Companies improve their customer base with strategies as follows :
• Reduce customer defection rate
• Increasing the longevity of customer relationships
• Enhancing the growth potential of each customer through
“Share of wallet” , cross-selling, and up-selling.
• Sales from existing customers can be increased with new
opportunities and offerings
• Making low-profit customers more profitable or terminating them
• To avoid direct termination, encourage customers to buy more
• Forego certain feature
• Pay higher amounts or fees
• Focusing efforts on high profit customers
• The most profitable ones can be treated in a special way.
Building loyalty and creating strong
customer relationship is the dream of every
marketer
Listening to the customer needs is
crucial to relationship
management. Many companies
have ongoing mechanisms that
keep their marketers permanently
plugged in to frontline customer
feedback
Building loyalty and creating strong
customer relationship is the dream of every
marketer
Listening to the customer needs is
crucial to relationship
management. Many companies
have ongoing mechanisms that
keep their marketers permanently
plugged in to frontline customer
feedback
Developing loyalty programs, that reward
high profit customers can help build strong
relations. Usually, companies create
Frequency programs in a way that lockscustomer in and creates significant loss
switching .
Building loyalty and creating strong
customer relationship is the dream of every
marketer
Listening to the customer needs is
crucial to relationship
management. Many companies
have ongoing mechanisms that
keep their marketers permanently
plugged in to frontline customer
feedback
Developing loyalty programs, that reward
high profit customers can help build strong
relations. Usually, companies create
Frequency programs in a way that lockscustomer in and creates significant loss
switching .
Limited member clubs help build long term loyal customers. Fees and membership conditions wards of people with fleeting interest.
Creating institutional ties
to provide customers with
special supplies or equipment
Win- Back ex-customers reviewing
and resolving exit
interviews and lost
customer surveys.
Special thanks
• https://www.flickr.com/photos/sean-b/• https://www.flickr.com/photos/danielygo/• https://www.flickr.com/photos/68751915@N05/• ttps://www.flickr.com/photos/griddlecakes/• https://www.flickr.com/photos/59937401@N07/• https://www.flickr.com/photos/61278574@N06/• https://www.flickr.com/photos/jordanfischer/• https://www.flickr.com/photos/stormkatt/• https://www.flickr.com/photos/jenumfamily/• https://www.flickr.com/photos/alancleaver/
Thank you!
Created by :
Ashwin SasikumarGovt. Model Engineering College, Kochi
Prof. Sameer Mathur
IIM Lucknow
www.IIMinternship.com
During an internship under :