Chapter 1 - Customer satisfaction and loyalty.ppt

CRM

1. Prof. Aparna Kanchan
Customer Satisfaction, Loyalty and
Customer Relationship Management
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2. Learning Objectives
Basic Marketing Concepts
Understanding customer satisfaction and its
measurement
Having insights on customer loyalty, importance
and benefits
Insights on how to build loyal customers
Understanding customer databases, customer
relationship management and strategies
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3. Kotler on Marketing
It is no longer
enough to
satisfy
customers. You
must delight
them.
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4. The Marketing Concept
•Holdsthatachievingorganizationalgoalsdependson
determiningtheneedsandwantsoftargetmarketsand
deliveringthedesiredsatisfactionsmoreeffectivelyand
efficientlythancompetitorsdo.
•Customerfocusandvaluearepathstosalesandprofits
•Themarketingandsellingconceptsareoftenconfused.The
primarydifferencesare:
•The selling concept takes an “inside-out” perspective
(focuses on existing products and uses heavy promotion
and selling efforts).
•Themarketingconcepttakesan“outside-in”perspective
(focusesoncustomerneeds,values,andsatisfaction).
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5. Customer Satisfaction and Loyalty -the Backbone of
Company’s Sales Process
Findcustomers Wincustomers Keepcustomers
Finding Winning Keeping
Itsallaboutfinding,winningandkeepingcustomers…
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6. Customer Satisfaction and its Measurement
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7. Core Marketing Concept
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Need
Want
Demand
Value &
Satisfaction
Market
Products
Services
Ideas
Transaction &
Relationship
Profitable
Customer
Relationship
Building and maintaining profitable customer relationships by delivering superior
customer value and satisfaction
-Philip Kotler

8. Customer-Orientations
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9. Customer Satisfaction
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What is
customer
satisfaction? •Customersatisfaction(CSAT)
isameasureofhowwella
company’sproductsand
servicesmeetcustomers’
expectations.
•Itreflectsyourbusiness’
healthbyshowinghowwell
yourproductsareresonating
withbuyers.

10. What is Customer Satisfaction?
Satisfaction represents a veritable key of modeling the acquisition behavior of the
customer, being supported by three groups of variables:
1.Cognitive variables, based on the qualitative superiority of the products given by
the performance.
2.Affective variables, based on the emotions produced to the customers.
3.Conative variables, based on the interaction between the provider and the
customer in the buying act.
Customer satisfaction is an overall customer attitude towards a
service provider, or an emotional reaction to the difference between
what customers anticipate and what they receive, regarding the
fulfillment of some need, goal or desire.
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11. Customer Satisfaction
Satisfactionisaperson’sfeelingsofpleasureor
disappointmentthatresultfromcomparingaproduct’s
perceivedperformance(oroutcome)toexpectations.
Iftheperformancefallsshortofexpectations,thecustomer
isdissatisfied.
Ifitmatchesexpectations,thecustomerissatisfied.
Ifitexceedsexpectations,thecustomerishighlysatisfiedor
delighted.
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12. Customer satisfaction and Product/ Service Quality
Satisfaction will also depend on product and service quality
But what is Quality?
Fitness for use
Conformance to requirements
Freedom from variation
Totality of features and characteristics of a product or
service that bear on its ability to satisfy stated or
implied needs
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13. Customer Satisfaction Requirements
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Proper research before hand
Proper offering
Proper pricing
Proper availability

14. How do buyers form their expectations
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Past buying experiences
Advice from friends and associates
Marketer’s information and promises
Competitors information and promises

15. Total Customer Satisfaction
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16. Measuring Satisfaction
Periodic surveys
Customer loss rate
Mystery shoppers
Monitor competitive performance
Customer Complaints
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17. The Generic Value Chain
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18. What is Customer Perceived Value?
Customerperceivedvalueisthedifferencebetween
theprospectivecustomer’sevaluationofallthe
benefitsandallthecostsofanofferingandthe
perceivedalternatives.
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19. Determinants of
Customer Perceived Value
Image benefit Psychological cost
Personal benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefitTotal customer cost
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CPV = TCB-TCC

20. Dell Re-established its Commitment to Value
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21. Steps in a Customer Value Analysis
•Identify major attributesand benefits that customers
value
•Assessthe qualitative importance of different
attributes and benefits
•Assessthe company’s and competitor’s
performanceson the different customer values
against rated importance
•Examine ratings of specific segments
•Monitorcustomer values over time 21

22. Establishing Value
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23. Customer Loyalty, its Importance and
Benefits
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24. What is Loyalty?
Loyalty is a deeply held commitment to re-buy
or re-patronize a preferred product or service
in the future despite situational influences and
marketing efforts having the potential to cause
switching behavior.
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25. Importance of Customer Loyalty
Moresizeofthewallet
Highconversionrate
Higherprofitability
Lesscostly
Highervolumeandfrequency
Resourceplanning
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26. BENEFITS OF HAVING A LOYAL CUSTOMER
Loyalcustomersarenotactivelysearchingfordifferent
suppliers.
Loyalcustomersarenotopentopitchesfromcompeting
companies.
Whenacustomerhasbrandloyalty,theyarenoteasily
influencedbylowprice.Theyarewillingtopaymorefor
thesamequalityproductorservicethattheyare
accustomedtoandenjoy.
Loyalcustomersareopentoothergoodsorservices
providedbyparticularbusiness.
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27. How to build Customer Loyalty
Howtokeepcustomers?
Whattodo?-Whatistheproblem?
1)Create a Customer
Loyalty Program
2)Referral Program
3)Encourage Customer
Feedback
Firstthingsfirst…
Whereistheproblem?
Find customers Wincustomers Keepcustomers
Finding
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Winning Keeping

28. 28

29. Types of Customer Loyalty
Behavioral Measures: Customer’s regularity and
frequency of purchases as a sign of loyalty.
Attitudinal Measures: Use of attitudinal data to indicate
the emotional and psychological connection
Composite Measures: Combination of first two
measurements.
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30. Attracting & Retaining Customers
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31. Customer Retention –Ways to reduce churn
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Equip staff with better training and tools
Prompt response to customer complaints
Design processes of least resistance
Effective organization structure to address customer
complaints
Provide incentives to effective staff

32. Need for Customer Retention
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33. Customer Relationship Management
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34. Customer Relationship Management
Processofcarefullymanagingdetailedinformationabout
individualcustomersandallcustomer“touchpoints”tomaximise
loyalty
Acustomer“touchpoint”isanyoccasiononwhichacustomer
encountersthebrand/product
Actualexperience
Personalandmasscommunication
Casualobservation
Companiesuseinformationgathered
Personalizedmarketing
Permissionmarketing
Customerempowerment
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35. Framework for CRM
•Identify prospects and
customers
•Differentiate customers by
needs and value to company
•Interact to improve
knowledge
•Customize for each
customer
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36. CRM Dimensions
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37. How does CRM Help an Organization?
•Enhance the bottom-line
•Generation of leads
•Increased Referrals
•Customer Support
•Improve Product and Services
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38. Attracting and Retaining Customers
•Reduce the rate of defection
•Increase longevity
•Enhance share of wallet
•Terminate low-profit customers
•Focus more effort on high-profit customers
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39. Loyalty Programs
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40. Remember…..remember……remember…..remember…
Purchase
Characteristics
Quality
Improvements
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