Customer Behavior FINAL

7/28/2019 Customer Behavior FINAL

1/6

Customer behavior

7OSFRAMEWORK

OCCUPANT

ORGANIZATIONS

OPERATIONS

OUTLETS

OCCASSIONS

OF BUYING

OBJECTIVES

OF BUYING

OBJECTIVES

OF

PURCHASE

What data do really you have on your customers Problems, Pains, Fears, Needs, Wants, Likes, Goals,

Influences, Relationships, Affiliations, Alliances, Experiences, Aspirations, Options, Expectations,

Questions, Knowledge, Skills, Activities, Attention, Communications, Interactions, Emotions,

Memories, Satisfaction, Perceptions, Beliefs, Admirations, Attitudes, Opinions, Values, Learning,

Ideas, Motivations, Objections, Priorities, Choices, Behaviors, Personality, Self-Concepts, Trust,

Loyalty, Attention, Recognition, Time, Energy, Risks, Investments, Rewards, ROI, Lifestyle, Lifecycle

Stage, Social Class, Culture, Sub-culture, Age, Family, Education, Hobbies, Interests

1 (occupant) who is consumer

Helps to understand consumers geographic, demographic, psychographic & media graphicprofile.

Demographic profile is the study of age,gender,income, occupation, educationalqualifications of the consumer.

Psychographic profile is the study of the lifestyle of the consumer as expressed by activities ,interests & opinions of the consumer.


2/6

Geographic profile is the region to which the consumer belongs . Media graphic are the mediahabits of the consumer

2 Object of purchase:

What are the features , sizes, colours ,flavours, etc that the consumer seeks? Products soft drinks, Product forms cols v/s lime v/s orange Brands Coke v/s Pepsi

3 objective of buying explain what benefits the consumer expects the product or services to serve. What benefit the consumer is seeking What motive is he trying to satisfy? Example fairness creame

4 Occasion:

Buying rate or buying frequency of consumers & occasions on which they would buy theproduct or service for the desired benefits.

Example buying during festivals5 outlets:

Type &nature of outlets from where the customer make choice. Type include retail shop, grocery store& wholesalers shop. Nature of outlets urban outlets, shopping malls, or rural shops.

6 operation (how do they buy)What kind of background information do consumers collect before buying & from whom

they seek this information.

Example information collected before purchase.

7 organisation: (who is involved)Organization of information sources around the key players in the decision process

Customer Relationship Management (CRM) is: the integration of sales, marketing, service and

support strategy, process, people and technology to maximize customer acquisition, value,relationships, retention and loyalty.

A Redesigning of your Business from the Outside In. Customers, Data and Database at the Center of your Organization (Customer-

centricity).

A organization-wide single customer view. A Foundation for 1to1 Marketing: Treating Different Customers Differently (Single

Ticket Buyer vs. Subscriber)


3/6

A Means to Your Total Customer Development Ends.

CRM STRATEGIES:

Customer Acquisition

Gain the greatest number of new Best customers as early in their lifespan as possible. Customer Retention

Retain and expand your business and relationships with your customers through up-selling,cross-selling and servicing.

Customer Loyalty

Offer programs to ensure that your customers happily buy what you offer only from you.Customer Evangelism

Enable loyal customers to become a volunteer sales force.

Cost Reduction

Reduce costs related to marketing, sales, customer service and support.Improve Productivity

Enhance your e-business strategies.

Customer Segments

Suspects, Visitors, Prospects, Subscribers, Patrons, Members, Ticket Buyers, Users,Consumers, VIPs, Volunteers, Annual / Major Donors, Advisors, Advocates, Legislators,

Strategic Partners, Sponsors

?

Customers

Suspects, Visitors, Prospects, Subscribers, Patrons, Members, Ticket Buyers, Users,Consumers, VIPs, Volunteers, Annual / Major Donors, Advisors, Advocates, Legislators,

Strategic Partners, Sponsors

Users

Management, Employees, VisitorsSuppliers

Services - Consultants CRM / Customer Development Experts

Products - TechnologySoftware, Hardware, Connectivity


4/6

IMPORTANCE OF CUSTOMER BEHAVIOUR

Importance of customer relationship:

It typically costs 5-10 times as much to acquire a new customer as it does to retain an existingone.

Some companies can boost profits by almost 100% by retaining just 5% more of theircustomers. Harvard Business Review (Reicheld & Sasser) A recent McKinsey study showed that the average new customer spends $24.50 at a given

web site in the first 3 months as a shopper. The average repeat customer spends $52.50 every

3 months.

Most companies lose 50% of their customers in 5 years (Harvard University) On average only 15% of a sites customers consider themselves loyal to it. The loyalty rating

among people who had experienced a problem was only 6%. Customers who had not

experienced problems indicated a customer loyalty rating of 19%. The loyalty rating among

customers who had experienced problems but were satisfied with the way they were

handled: 21%. (Digital Idea)

70% of repeat purchases are made out of indifference to the seller, NOT loyalty. (eLoyalty)The web customer is only 1 click away from your competition

Customer relations is the process by which companies promote customer satisfaction and,moreover, loyalty. At its most basic, it involves managing communications with customers,particularly customer questions and complaints, and resolving disputes amicably. The ultimategoal of most customer relations programs is to build long-term relationshipsthose in whichthe customer keeps buying the product or service and recommending it to otherswithcustomers. To meet this goal, companies may go to great lengths to build a strong reputationfor lavishing their customers with special services, discounts, gifts, or other benefits.

Customer relations has become such an important paradigm in modern business that it iscommon to refer to relations with a company's "internal" and "external" customers. Theimplication here is that functional units of a large organization, e.g., themanagementinformation systems department, are expected to develop a service-oriented rapport withthe people inside the business who require that unit's assistance. In this sense customerrelations is linked to stakeholder theory, an approach to business that emphasizes meetingthe needs of all interested parties in a business relationship, including customers, outsidevendors, shareholders, and others.

EVOLUTION OF RELATIONSHIP MARKETING:

Marketing Management has evolved to become a multi faceted Studies in Marketing do not involve the

4Ps anymore. Marketing Managers of today are no longer following the same rules of game that they

followed two decades ago. Technology has changed the rules of the game and competition has becomemore intense. Instead of concentrating on selling the product, the marketing effort is now directed to

expanding the customer base and relationship.

By widening the customer base using relationship marketing, they see the possibility to lengthen the
http://www.referenceforbusiness.com/encyclopedia/Man-Mix/Management-Information-Systems.htmlhttp://www.referenceforbusiness.com/encyclopedia/Man-Mix/Management-Information-Systems.htmlhttp://www.referenceforbusiness.com/encyclopedia/Man-Mix/Management-Information-Systems.htmlhttp://www.referenceforbusiness.com/encyclopedia/Man-Mix/Management-Information-Systems.htmlhttp://www.referenceforbusiness.com/encyclopedia/Man-Mix/Management-Information-Systems.html


5/6

revenue lines. Therefore Marketing professionals to be will benefit greatly by understanding more aboutRelationship Marketing as well as direct marketing, service marketing and CRM etc.

From times immemorial including the times when trading used to happen through the silk route,

the basis of trading was the relationship that was built on trust, loyalty and previous history of

transaction. Traditionally if you analyze the jewelers business, you will see that the families have

always been going to one jeweler for generations together. The same is the case with banker who wouldextend loan to a well known individual who was personally known or referred by a known person. Even

while renting out a house, the owner prefers to let out to a known person or a person referred by a

known party where there exists some kind of relationship. Therefore we can say that relationship hasalways been the basis of business.

However the growth of Relationship Marketing as a discipline and practice got an impetus post

industrial era. Industrialization led to mass production as well as standardization of the products and

services. The businesses started expanding their geographic boundaries and exploring new markets

where in it became necessary for them to evolve new methods of marketing. They understood theimportance of having to reach out and build a relationship with a customer and make efforts to retain the

customer rather than keep spending on marketing to new customers every time.

Organizations realized the importance of having to put the Customer ahead of its business.

Organizational philosophy seemed to have shifted from profits, products and markets to Customer first.

Right from product design to manufacturing as well as selling began to be designed around what theCustomer wants, his needs, his comfort and satisfaction. Customer focus and relationship became the

Organizational focus and lead to many new trends in manufacturing methods the most significant being

the concept Total Quality Management.

On the marketing front too, the managers had to come up with new channels for marketing and sales for

they had to reach out to bigger markets and new customer segments. As a result we saw the emergence

of Direct Mailer or catalogue sales was born in the 1960s.

Information technology further enhanced the marketing methods whereby database marketing, direct

mailing and customer loyalty programs along with marketing services came into being. With the adventof internet we have see several more marketing methods like e commerce, online selling, one to one

selling happening. All these marketing channels have been built around the concept of relationship

marketing. We as consumers have now are used to being courted by the companies and given individualattention. Most of our purchases of products and services are based on relationships with companies that

make us comfortable and valued.

Customer retention:

Generally works on the 80-20 principle wherein 80% of your business may be contributed through 20%

of your business. Thus it becomes very important to retain customers. Here are three strategies

mentioned in detail to increase customer retention.


6/6

1)Offering financial benefits to increase customer retentionFinancial benefits such as frequency

programs as well as club memberships provide exclusivity to customers and therefore they are retained

to the product / company

2) Increasing social bonds for customer retentionEspecially true for services sectors, increasing

social bonds with the right cues helps the customer relate better with the service / product and therefore

helps in developing social bonds with the company / brand. Once such social bonds are developed, thecustomer rarely shifts to another brand.

3)Building structural ties for customer retentionThisstrategybelieves in making long term ties

with the customers such that he is retained with the brand / product / company for a longer time. Sub

strategies might including tying up for a longer time with the customer, charging lower prices or turningthe service into long term.

With increasing competition in each sector, customer retention is becoming more and more importantand therefore these strategies are increasingly being used by major organizations to retain customers.
http://www.marketing91.com/offering-financial-benefits-customer-retention/http://www.marketing91.com/offering-financial-benefits-customer-retention/http://www.marketing91.com/offering-financial-benefits-customer-retention/http://www.marketing91.com/building-structural-ties-customer-retention/http://www.marketing91.com/building-structural-ties-customer-retention/http://www.marketing91.com/building-structural-ties-customer-retention/http://www.marketing91.com/strategy/http://www.marketing91.com/strategy/http://www.marketing91.com/strategy/http://www.marketing91.com/strategy/http://www.marketing91.com/building-structural-ties-customer-retention/http://www.marketing91.com/offering-financial-benefits-customer-retention/

Customer Behavior FINAL

Documents

Transcript of Customer Behavior FINAL