Kotler_mm16e_inppt_marketingmanagement19.pptx

Management marketing presentation

1. Building Customer Loyalty

2. Learning Objectives 19.1 Explain how a company should balance its acquisition and retention efforts. 19.2 Discuss how a company can manage customer satisfaction and loyalty. 19.3 Describe how companies manage customer relationships. 19.4 Discuss how a company should manage customer lifetime value.

3. Managing Customer Acquisition and Retention The customer acquisition funnel Awareness Appeal Ask Act Advocate

4. The 5-A Customer Acquisition Funnel

5. Balancing Customer Acquisition and Customer Retention Need to attract new customers while at the same time, retain and cultivate existing ones Estimate customer conversion rates and retention rates Satisfied customers are customer relationship capital

6. Managing Customer Satisfaction and Loyalty (1 of 4) Understanding customer satisfaction Satisfaction is a person’s feelings of pleasure or disappointment that result from comparing the perceived performance (or outcome) of a product or service with expectations

7. Managing Customer Satisfaction and Loyalty (2 of 4) Product and service quality as a driver of customer satisfaction Quality Performance v ersu s consistency

8. Managing Customer Satisfaction and Loyalty (3 of 4) Measuring customer satisfaction A highly satisfied customer: Stays loyal longer Buys more Talks favorably about the company Pays less attention to competing brands Is less sensitive to price Offers ideas to the company Costs less to serve than new customers

9. Managing Customer Satisfaction and Loyalty (4 of 4) Building customer loyalty Interact closely with customers Develop loyalty programs Build brand communities

10. Managing Customer Relationships Customer relationship management (C R M) The process of carefully managing detailed information about individual customers and all customer touch points to maximize loyalty

11. Customization Make the company’s offering as personally relevant as possible to as many customers as possible Permission marketing

12. Customer Empowerment Customer empowerment Customers chooses whether and how they want to engage with company marketing Tangible value

13. Dealing With Customer Complaints Make it easy for customers to complain Set up a 24/7 hotline Reach out to dissatisfied customers Identify real source of dissatisfaction before finding a solution Accept responsibility Resolve the complaint

14. The Concept of Customer Lifetime Value (1 of 2) Customer lifetime value (C L V) The monetary equivalent of the value that customers will create for the company during their tenure with the company aka customer equity

15. The Concept of Customer Lifetime Value (2 of 2) Customer profitability analysis Activity-based costing Aims to identify the real costs associated with serving each customer—the costs of products and services based on the resources they consume

16. Customer Lifetime Value and Brand Equity Both types of equity matter: Customer equity focus: Bottom-line financial value Brand equity focus: Brand strategy

17. Building Customer Lifetime Value Improve customer service Engage customers Enhance the growth potential of each customer Manage unprofitable customers Reward the most profitable customer

18. Creating Customer Loyalty by Building Trust Three building blocks: Competence Honesty Benevolence

19. Measuring Customer Lifetime Value Customer lifetime value The net present value of the stream of future profits expected over the customer’s lifetime purchases Consider: Monetary value Strategic value

20. Discussion Questions (1 of 2) Car makers, responding to customer demand and regulatory requirements, have been introducing hybrid and electric vehicles. Discuss the customer acquisition funnel as it relates to attracting customers for electric cars. Does it matter if the company in question is new, like Tesla, versus older, like Ford?

21. Discussion Questions (2 of 2) Hotels and airlines are recognized for rewarding their most loyal customers. How do Marriott and Delta build customer value across customer touch points? Consider your response in light of the 80/20 rule. What can you conclude about the value of monitoring customer satisfaction?