creating customer value,satisfaction and loyalty

8/8/2019 Creating Customer Value,Satisfaction and Loyalty

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Customer value

Customer life time value

Customer satisfaction

Measurement of customer satisfaction

Customer relationship management

Customer loyalty



Topmanagement

Middlemanagement

Front-line people

CUSTOMERS



CUSTOMERS

Front-line people

Middlemanagement

Topmanagement



Customer perceived value (CPV): is the differencebetween the prospective customers evaluation of allthe benefits and all the costs of an offering and theperceived alternatives.

Total customer value: perceived monetary value of

the bundle of economic, functional and psychologicalbenefits customers expect from a given marketoffering.

Cost: is the bundle of costs customer expects to incurin evaluating, obtaining, using and disposing of thegiven market offering , including time, energy and thepsychic cost.



Improving customer value:1. By improving customer value2. Reducing non-monetary cost3. Reducing monetary cost



Value proposition: whole cluster of benefits company promises to provide.

Value-delivery system: includes all the experiences

customer will have on the way to obtaining and usingthe offering .



Customer lifetime value (CLV): net present value of the stream of future profits expected over thecustomers lifetime purchases.

Expected revenues - expected costs



Satisfaction means a persons feelings of pleasureor disappointment resulting from comparing aproducts perceived performance/outcome in

relation to his/her expectations.

Performance < Expectation => Dissatisfiedcustomer

Performance = Expectation => Satisfied customer

Performance > Expectation => Delighted customer



Formed by past buying experience, friends advice,marketers information & promises.

If expectations are too high, buyers may be

disappointed. If expectations are too low, not enough buyers, but

those who buy will be satisfied.

Examples: GM, JetBlue Airways



Customers decision to be loyal or to defect is the sumof many small encounters with the company.

Companies need to create a branded customerexperience.

Example: Joie de Vivre Hospitality Inc.

Customer Loyalty



Many companies systematically measure customersatisfaction & factors shaping it.

Example: IBM tracks how satisfied customers are witheach IBM salesperson they encounter. This is a factorin each salespersons compensation.



Customer satisfaction is the key to customer retention.

Highly satisfied customers-

Stay loyal to the company

Buy more as company introduces new/upgraded

products Talks favorably about company & its products

Pays less attention to competing brands

Offer product or service ideas to company



Customer satisfaction is not proportional to customer

loyalty.

Customer satisfaction on a scale of 1-5,

Level 1 - Customer likely to abandon

company Level 2-4 - Customer is fairly satisfied, but will

switch if theres a better offer

Level 5 - Customer is delighted & very likely

to repurchase



High satisfaction or Customer delight creates anemotional bond of the customer with thebrand/company.

Example: Xerox found that completely satisfiedcustomers are 6 times more likely to repurchase over18 months than very satisfied customers.



Periodic surveys-

y Track customer satisfaction directly

y Can measure repurchase intention & willingness to

recommend company/brand to othersy Example: Paramount conducted 55 Web-based surveys

on its theme parks in 1 year & received 100,000 responseson topics including rides, dining, shopping, games &shows.



Customer Loss Rate-

y Companies can monitor the Customer Loss Rate, i.e.,the number of customers a company loses over a specificperiod of time.

y This helps to contact customers who have stoppedbuying their products or who have switched to anothersupplier to learn why this happened.



Mystery Shoppers-

y Companies can hire mystery shoppers to pose aspotential buyers & report on strong & weak pointsexperienced.

y This can also be used for competitors products.

y Managers can pose as mystery shoppers themselves toexperience first-hand the treatment they receive or the way their concerns are handled.



For Customer Satisfaction surveys, its important to askthe right questions.

The most important question- Would yourecommend this product or service to a friend?

Usually surveys are focused on brand image, pricing,product features etc.

If customer recommends product/company to afriend, it means he/she is satisfied & that reflects allfunctional areas which contribute to a customersexperience.



Competitors performance : although a goodpercentage of your customers are satisfied, for othercompanies this percentage may be higher than yours.

Internet : dissatisfied or angry customers might useinternet to voice their bad experiences and negativereviews regarding a product or company.



CRM is the process of carefully managing detailedinformation about individual customers and allcustomer touch points to maximize customer

loyalty.

T ouch point any occasion on which the customerencounters the brand or product.

CRM enables companies to provide excellent real timecustomer service through the effective use of individual account information.



IDENTIFY Y OUR PR OSPECTS AND CUSTOMERS

DIFFEREN

TIA T

E CUSTO

MERS INT

ERMSO

FT

HEIR NEEDS AND VALUES TO Y OUR COMPANY

INTERACTWITH INDIVIDUAL CUSTOMERS TO IMPR O VE Y OUR KNO WEDGE ABOUT THEIR INDIVIDUAL NEEDS AND TO BUILD STR ONGER RELA TIONSHIPS

CUSTOMIZE PR ODUCTS,SERVICES AND MESSAGE TO EACH CUSTOMER



REDUCING THE RA TEOF CUSTOMER DEFECTION

INCREASING THE LONGEVIT Y OF THE CUSTOMER

RELA TIONSHIP ENHANCING THE GR O W TH POTENTIALOF EACH

CUSTOMER

MAKING LO W-PR OFIT CUSTOMERS MORE

PR OFIT ABLEOR TERMINA TING THEM FOCUSING DISPR OPOR TIONA TE EFFOR T ON

HIGH VALUE CUSTOMERS



POTENTIA LS

PROSPE

CT

S

FIRST TIME CUSTOMERS

R EPEAT

CUST

OME

RS

CLIENTS

MEMBERS

AD VOC ATES

PAR TNERS

DISQU A LIFIEDPROSPECTS

INA CTI V E OR EX -

CUSTOMERS

STEPS IN

ATTR A CTING AND R ETAINING

CUSTOMERS



Acquiring new customer can cost five times more thansatisfying and retaining current customers. It requiresa great deal of effort to induce satisfied customers toswitch away from their current suppliers.

The average company loses 10% of its customer each year.

A 5% reduction in the customer defection rate canincrease profits by 25% to 85% depending on theindustry.

The customer profit rate tends to increase over the lifeof the retained customer due to increased purchases,referrals , and price premiums and reduced operatingcosts to service.



1. Hog tales magazine2.A tourism handbook

3.Emergency road service4.Special designed insurance program5. Theft reward services6. Discount hotel rates7. Fly & ride program



THANK Y OU

Presented by :

Akshay o jha

Divya satheeshMasna majeed

Sheeza ashraf

creating customer value,satisfaction and loyalty

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