Customer value Customer life time value Customer satisfaction Measurement of customer satisfaction Customer relationship management Customer

loyalty

Top management Middle management Front-line people CUSTOMERS

CUSTOMERS Front-line people Middle management Top management

Customer perceived value (CPV): is the difference between the prospective customer s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Total customer value: perceived monetary value of the bundle of economic, functional and psychological benefits customers expect from a given market offering. Cost: is the bundle of costs customer expects to incur in evaluating, obtaining, using and disposing of the given market offering , including time, energy and the psychic cost.

Improving customer value: 1. By improving customer value 2. Reducing non-monetary cost 3. 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 using the offering .

Customer lifetime value (CLV): net present value of the stream of future profits expected over the customer s lifetime purchases. Expected revenues - expected costs

Satisfaction means a person s feelings of pleasure or disappointment resulting from comparing a products perceived performance/outcome in relation to his/her expectations. Performance < Expectation => Dissatisfied customer Performance = Expectation => Satisfied customer Performance > Expectation => Delighted customer

Formed by past buying experience, friend s advice, marketer s 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

Customer Loyalty
Customer s decision to be loyal or to defect is the sum of many small encounters with the company. Companies need to create a branded customer experience. Example: Joie de Vivre Hospitality Inc.

Many companies systematically measure customer satisfaction & factors shaping it. Example: IBM tracks how satisfied customers are with each IBM salesperson they encounter. This is a factor in each salesperson s 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 there s a better offer Level 5 - Customer is delighted & very likely to repurchase

High satisfaction or Customer delight creates an emotional bond of the customer with the brand/company. Example: Xerox found that completely satisfied customers are 6 times more likely to repurchase over 18 months than very satisfied customers.

Periodic surveysy Track customer satisfaction directly y Can measure repurchase intention & willingness to

recommend company/brand to others y Example: Paramount conducted 55 Web-based surveys on its theme parks in 1 year & received 100,000 responses on topics including rides, dining, shopping, games & shows.

Customer Loss Ratey Companies can monitor the Customer Loss Rate, i.e.,

the number of customers a company loses over a specific period of time. y This helps to contact customers who have stopped buying their products or who have switched to another supplier to learn why this happened.

Mystery Shoppersy Companies can hire mystery shoppers to pose as

potential buyers & report on strong & weak points experienced. y This can also be used for competitors products. y Managers can pose as mystery shoppers themselves to experience first-hand the treatment they receive or the way their concerns are handled.

For Customer Satisfaction surveys, its important to ask the right questions. The most important question- Would you recommend this product or service to a friend? Usually surveys are focused on brand image, pricing, product features etc. If customer recommends product/company to a friend, it means he/she is satisfied & that reflects all functional areas which contribute to a customer s experience.

Competitors performance : although a good percentage of your customers are satisfied, for other companies this percentage may be higher than yours. Internet : dissatisfied or angry customers might use internet to voice their bad experiences and negative reviews regarding a product or company.

CRM is the process of carefully managing detailed information about individual customers and all customer touch points to maximize customer loyalty. Touch point any occasion on which the customer encounters the brand or product. CRM enables companies to provide excellent real time customer service through the effective use of individual account information.

IDENTIFY YOUR PROSPECTS AND CUSTOMERS DIFFERENTIATE CUSTOMERS IN TERMS OF THEIR NEEDS AND VALUES TO YOUR COMPANY INTERACT WITH INDIVIDUAL CUSTOMERS TO IMPROVE YOUR KNOWEDGE ABOUT THEIR INDIVIDUAL NEEDS AND TO BUILD STRONGER RELATIONSHIPS CUSTOMIZE PRODUCTS,SERVICES AND MESSAGE TO EACH CUSTOMER

REDUCING THE RATE OF CUSTOMER DEFECTION INCREASING THE LONGEVITY OF THE CUSTOMER RELATIONSHIP ENHANCING THE GROWTH POTENTIAL OF EACH CUSTOMER MAKING LOW-PROFIT CUSTOMERS MORE PROFITABLE OR TERMINATING THEM FOCUSING DISPROPORTIONATE EFFORT ON HIGH VALUE CUSTOMERS

POTENTIALS

PROSPECTS

DISQUALIFIED PROSPECTS

STEPS IN ATTRACTING AND RETAINING CUSTOMERS

FIRST TIME CUSTOMERS REPEAT CUSTOMERS

CLIENTS

INACTIVE OR EXCUSTOMERS

MEMBERS

ADVOCATES

PARTNERS

Acquiring new customer can cost five times more than satisfying and retaining current customers. It requires a great deal of effort to induce satisfied customers to switch away from their current suppliers. The average company loses 10% of its customer each year. A 5% reduction in the customer defection rate can increase profits by 25% to 85% depending on the industry. The customer profit rate tends to increase over the life of the retained customer due to increased purchases, referrals , and price premiums and reduced operating costs to service.

1. Hog tales magazine 2.A tourism handbook 3.Emergency road service 4.Special designed insurance program 5. Theft reward services 6. Discount hotel rates 7. Fly & ride program

THANK YOU
Presented by: Akshay o jha Divya satheesh Masna majeed Sheeza ashraf