chapter 3 marketing management creating long term loyalty relationship

Chap 3 creating long term loyalty relationship

1. Creating Long-Term Loyalty Relationships

2. Benefits of customer satisfaction: Stays loyal longer. Buys more. Talks favorably to others. Pays less attention to competing products. Less sensitive to price. Higher returns , low risks.

3. Measuring Satisfaction: Periodic Surveys Customer Loss Rate Mystery Shoppers Monitor Competitive Performance

4. Product and service Quality: Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Product and service quality, customer satisfaction, and company profitability are intimately connected. Higher levels of quality result in higher levels of customer satisfaction, which support higher prices and (often) lower costs. Studies have shown a high correlation between relative product quality and company profitability.

5. Maximizing customer lifetime value: 80 – 20 rules. Customer profitability: A profitable customer is a person, household and company that over time yields a revenue stream exceeding by an acceptable amount the company’s cost stream for attracting, selling and serving that customer.

6. CUSTOMER – PRODUCT PROFITIBILITY ANALYSIS

7. Customer lifetime value (CLV): The net present value of the stream of future profits expected over the customer’s lifetime purchase. Customer Relationship Management (CRM): The process of carefully managing detailed information about individual customers to maximize loyalty.

8. Attracting and Retaining customers (Marketing Funnel )

9. The Marketing funnel identifies the percentage of the potential target market at each stage in the decision process, from merely aware to highly loyal.

10. Building loyalty

11. Three marketing activities that improve loyalty and retention.

12. INTERACT CLOSELY WITH CUSTOMERS:

13. Developing Loyalty Programs: Frequency programs: designed to reward who buy frequently. Club Membership Program: can be open or limited.

14. CREATE INSTITUTIONAL TIES: The company may supply business customers with special equipment or computer links that help them manage orders, payroll, and inventory.