Markman visual model creating customer value, satisfaction & loyalty by raymund c. piñon
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Transcript of Markman visual model creating customer value, satisfaction & loyalty by raymund c. piñon
Visual Model: Creating Customer Value,
Satisfaction and LoyaltyChapter 5
Raymund C. Piñon
Marketing Management V57
April 27, 2010
Rationale
The 3rd important task of Modern Marketing:
ObjectivesAt the end of the presentation, the participants should be able to understand concepts related to the 3rd marketing task of CONNECTING WITH CUSTOMERS
1. Customer Value, Customer Satisfaction, Customer Loyalty and how we deliver them?
2. What is the lifetime value of customers?3. How can companies cultivate strong customer
relationships?4. How can companies both attract and retain
customers?5. What is database marketing?
To Win Customers and ….Beat Competition!!!
Traditional
Customer-centered
X
To Win Customers and ….Beat Competition!!!
Create and Deliver Superior Customer Value
Total Customer
Satisfaction
Build Customer
Loyalty
Customers’ Perceived ValueCustomers are value maximizers
Total Costs
Money
Time
Effort
Psychological
Total Benefits
Product
Service
Personnel
Image
DeliveredValue
Steps in Customer Value Analysis
Identify features & benefits that customers value Assess qualitative importance
of attributes & benefits
Assess company’s and competitors’ performance on different values against ratedperformance
Examine ratings of specific segments Monitor customer values over time
Delivering High Customer Value
Value Proposition Value Delivery System
To Win Customers and ….Beat Competition!!!
Create and Deliver Superior Customer Value
Total Customer
Satisfaction
Build Customer
Loyalty
Total Customer Satisfaction
_ =
Perceived Performance
Buyer’sExpectation Satisfaction
Total Customer SatisfactionSatisfaction Depends on Quality
Totality of features and characteristics of products or services that satisfy stated or implied needs
What is Quality?
= or >
Product or Service
Meets or exceeds
Expectations
Total Customer SatisfactionInfluence of Customer Satisfaction
Total Customer SatisfactionMonitoring Customer Satisfaction
Periodic SurveysCustomer Loss Rate
Mystery ShopperCompetitors’ Performance
Total Customer SatisfactionSatisfaction is Related to Loyalty
To Win Customers and ….Beat Competition!!!
Create and Deliver Superior Customer Value
Total Customer
Satisfaction
Build Customer
Loyalty
Customer Lifetime ValueArt of attracting and keeping profitable customers
Maximizing Customer Lifetime Value
Customer Profitability
Customer Equity Lifetime Value
Maximizing Customer Lifetime ValueCustomer Profitability Analysis
C1 C2 C3
P1 + + +Highly profitable product
P2 + Profitable product
P3 - - Unprofitable product
P4 -Highly unprofitable product
High-profit customer
Mixed-bag customer
Losing customer
Maximizing Customer Lifetime ValueCustomer Profitability Analysis
Activity-Based Costing
Customer Portfolios• acquaintances• friends• partnersOr• Diversify portfolio to manage risk
Maximizing Customer Lifetime ValueMeasuring Customer Lifetime Value
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Number of Customers
Revenue per Customer
Variable Cost per Customer
Margin per Customer
Acquisition Cost per Customer
Total Cost or Profit
Present Value
Cultivating Customer Relationships
Customer Relationship Management Focuses on attracting and keeping right customers, and satisfying their needs
Process of carefully managing detailed information about individual customers and all customer “touch points” to maximize customer loyalty
Customer Relationship ManagementKey to retaining customers is relationship marketing
1. Identify prospects and customers
2. Differentiate customers in terms of: a. Their needs b. Their value to your company
3. Interact with individual customers to improve knowledge about needs and build stronger relationships
4. Customize products, services and messages to each customer
Customer Relationship ManagementIncreasing Value of Customer Base
1. Reduce customer defection
2. Increase longevity of relationship
3. Enhance growth potential of each customer
4. Make low-profit customers profitable or weed out
5. Focus on high-value customers
Customer Relationship ManagementAttracting and Retaining Customers
Reducing Defections Retention Dynamics
Disqualified ProspectsPotentials
Prospects
1st-TimeCustomer
RepeatCustomer
Clients
Members
Advocates
Partners
Inactive or Ex-Customers
Customer Relationship ManagementBuilding Customer Loyalty
Interacting with Customers Creating Loyalty Programs
Personalizing Marketing Creating Institutional Ties
Customer Database and Database Management
Customer Database
Data Warehousing
Data Mining
Customer Database and Database Management
Identify prospectsChoose which customers receive a particular offer Deepen loyalty
Reactivate customer purchases Avoid mistakes
SummaryThe 3rd important marketing task of CONNECTING WITH CUSTOMERS
1. Customer Value, Customer Satisfaction, Customer Loyalty and how we deliver them
2. Lifetime value of customers3. How companies cultivate strong customer
relationships4. How companies attract and retain customers5. Database marketing
Customer Value
Satisfaction
Loyalty
=
Customer Lifetime Value
EquityProfitability
Win Customers, Beat Competition
Lifetime Value+
Customer Relationship Management
Value Proposition Value Delivery
System
Attract and Retain Customers
PerceivedBenefits
ExpectExpectationation
Customer Database & Database Mgt
B-C=
DV