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CusLomer AcqulslLlon SLraLegy

unlL lll
ulldlng cusLomer 8elaLlonshlp
1he acqulslLlon process perspecLlve sLaLes LhaL
acqulslLlon lncludes Lhe flrsL purchase as well
as oLher nonpurchase encounLers LhaL boLh
precede and follow Lhe purchase up unLll Lhe
Llme Lhe cusLomer makes a repeaL purchase
generaLe awareness and peneLraLlon for Lhelr
lnpuLs for AcqulslLlon
1he suspecLs
1he enqulrles
1he lapsed cusLomers
1he former cusLomers
1he compeLlLor's cusLomers
1he compeLlLor's lapsed cusLomers
1he compeLlLor's enqulrles
1he compeLlLor's former cusLomers
1he referrals
1he exlsLlng buyers
8equlslLes for effecLlve AcqulslLlon
1 locused approach
2 rovldlng a wlnwln plaLform
3 lnlLlaLe forum for communlcaLlon
4 ALLempL Lo mlnlmlze 'luu'
3 ro[ecLlon of beneflLs and noL producLs
6 ConLexLual appllcaLlon
7 locus on declslon process
8 ALLenLlon on adopLlon process
9 locus on opLlons of prospecLlve cusLomers
10 ulldlng up publlclLy and publlc relaLlons
11 ConcenLraLlon on exlsLlng cusLomers
1 locused approach
knowers [usL know Lhe exlsLence
referers prefer a producL/servlce
lndlfferenL don'L care aLLlLude
8e[ecLors menLally re[ecL cerLaln
2rovldlng wlnwln plaLform
eneflLs Lo boLh Lhe organlzaLlon and Lhe
prospecLlve consumer whlch would aLLracL Lhe
cusLomers who anLlclpaLe beneflLs
3 lnlLlaLe forum for communlcaLlon
CommunlcaLlon Lo be open and lnLeracLlve
Lnsure dependence every Llme Lhe cusLomer
1hls would brlng confldence
Would enable Lhem Lo move Lowards aqulslLlon
4 ALLempL Lo mlnlmlze luu
l fear
u uncerLalnLy
u doubL
ln Lhe buy sLage luu would be ln Lhe maxlmum level
ln Lhe subsequenL sLages luu would mlnlmlze
3ro[ecLlon of beneflLs noL producLs
1hls ls Lhe crlLlcal success facLor
CusLomers do noL buy producLs for Lhe sake of
1hey are lnLeresLed ln Lhe augmenLed beneflLs
promlsed by Lhe producL and whlch corresponds Lo
Lhelr expecLaLlon
6ConLexLual appllcaLlon
CusLomers assume dlfferenL roles ln varlous conLexLs
7 locus on declslon process
need ldenLlflcaLlon
search for lnformaLlon
posL purchase acLlon
lnLernal exLernal facLors affecLlng Lhe sLages
Learnlng moLlves
lamlly llfe sLyle
lncome level
8 ALLenLlon on adopLlon process
very less of LoLal number of cusLomers lnlLlally [oln
Lhe adopLlon process
lnlLlal adopLers (lnnovaLors)
Larly adopLers
Larly ma[orlLy
LaLe ma[orlLy
9 locus on opLlons of prospecLlve cusLomers
llnd ouL Lhe opLlons avallable Lo cusLomers ln Lerms of Lhe
roducL aLLrlbuLes
Channel of dlsLrlbuLlon
romoLlon measures
1here should be regular research on Lhese and based on Lhe
flndlngs offerlngs should be Lallored
10ulldlng up publlclLy and publlc relaLlons
ubllclLy boosLs lmage ln Lhe socleLy
Pelps Lo galn more cusLomers
1hls reason prompLs many organlzaLlons Lo
commlL Lhemselves Lo soclal needs
11 ConcenLraLlon on exlsLlng cusLomers
valuable spokespersons whose vlews would be raLed
very hlgh by Lhe prospecLlve cusLomers
rocess of AcqulslLlon
Lnqulry underLakes deLalled enqulry
lnLeracLlon lnLeracLs wlLh Lhe orgn
Lxchange Lerms of exchange mode of dellvery
CoordlnaLlon efforL from elLher slde
AdopLlon acqulslLlon ls compleLed
lnfluences on acqulslLlon
1ype of buylng 1 raLlonal
2 emoLlonal
1ype of producL 1convenlence shopplng
2 speclalLy producL
1ype of cusLomers 1 lndlvldual
2 organlzaLlon
Lconomlc envlronmenL 1markeL
2compeLlng forces
3supply demand condlLlons
4purchaslng power
ConLexLual operaLlons 1buyers's lnLenLlon
2 urgency
3prevlous experlence
4llfe sLyle of cusLomer
CusLomer lnLeracLlon managemenL(ClM)
SLands for lnLenslve lnLeracLlon beLween
cusLomers and Lhe organlzaLlon whlch ls
supporLed by Lechnology enabled mechanlsms
such as lnLerneL
8ouLes Lo ClM
1 Cnllne rouLes
2 Cffllne rouLes
3 CuLsourclng
Cnllne Lools
1oday's C8M pracLlLloners focus on onllne rouLes
lnLeracLlve webslLe
Web communlLles
ChaL rooms
Cffllne Lools
laceLoface lnLeracLlon
lnLeracLlve Lelevlslon neLwork
CuLsourclng Lools
lncludes elLher onllne or offllne rouLes or a
comblnaLlon of boLh
CrganlzaLlons someLlmes depend on speclallzed
Agencles aL Llmes lnclude prlvaLe call cenLre
SLages of cusLomer llfe cycle
SLaLus of cusLomer ln relaLlonshlp chaln
Level1 sLrangers
Level2 prospecLs
Level3 lnacLlve cusLomers
Level4 acLlve cusLomers
lacLors lnfluenclng ClM
naLure of buslness
Slze of organlzaLlon
number of cusLomers
1ypes of cusLomers
Ceographlcal spread of cusLomers
lrequency of conLacL
1ype of producL
1echnlcal supporL avallable
resales lnLeracLlon requlred
AfLer sales lnLeracLlon requlred
CompeLlLor's pracLlce of lnLeracLlon
LxLenL of loyalLy
Llfe cycle of cusLomers
MeLhods of ClM
1 AcLlve meLhod
2 8ecepLlve meLhod
3 lndlrecL meLhod
AcLlve meLhod
AnLlclpaLe Lhe expecLaLlons
8ecepLlve meLhod
8eacLs sulLably afLer sLudylng expecLaLlons
percepLlons behavloral paLLerns
lndlrecL meLhod
Cn lLs own observaLlons
Sales volume
number of complalnLs recelved
1ypes of complalnLs recelved
unlL lll 1
crossse//inq refers Lo Lhe pracLlce of promoLlng
compllmenLary lLems relaLed Lo Lhe lLem belng
cosLeffecLlve opporLunlLy
lf you were buylng a palr of shoes would you be
open Lo a suggesLlon Lo buy socks aL Lhe same
Whlle purchaslng a new cell phone would you
appreclaLe belng shown recommendaLlons for
relaLed accessorles llke a handsfree klL and
exLended charge baLLery?
upSelllng ls a pracLlce of offerlng cusLomers
an upgraded or premlum verslon of a
upselllng lnvolves promoLlng upgrades or
addons Lo cusLomers LhaL are exLra purchases
and lncrease sales
buy one geL one (CCC) lncenLlve
enhances cusLomers' shopplng experlence
lncreaslng sales volume
lL's a wln wln
lf used lncorrecLly however Lhey can damage
credlblllLy and saboLage markeLlng efforLs
1he key Lo effecLlve crossselllng and upselllng ls
putt|ng your customers' needs f|rst by addlng
value Lo Lhe cusLomer experlence wlLh your
relaLedlLem suggesLlons
Crossselllng helps Lo educaLe your cusLomers on
Lhe depLh and varleLy of whaL your buslness has
Lo offer
5boolJ oot ose ctosssellloq cotelessly os o fotom
to slmply posb mote ptoJocts ot setvlces
ustomer Acqu|s|t|on 1act|cs
1he A1MAN Mode|
acronym for acqulslLlon LacLlcal managemenL
Slx crlLlcal elemenLs
1 1argeLlng
2 Awareness generaLlon and producL poslLlonlng
3 AcqulslLlon prlclng
4 1rlal
3 usage experlence and saLlsfacLlon
6 osLlnLroducLory prlclng and Lhe creaLlon of long
Lerm value for Lhe producL or servlce
* 8efer noLes
CusLomer Llfe Cycle ManagemenL
CusLomer need
CusLomer need
CusLomer LqulLy
leverage Lhrough
Cross selllng up
CusLomer LqulLy
leverage Lhrough
Cross selllng up
referrals for new
referrals for new
*Refer Notes
1hree meLhods exlsL for LargeLlng cusLomers
1 lndlvldualcusLomer LargeLlng (flrsLdegree
2segmenLed LargeLlng (seconddegree LargeLlng)
3selfselecLlon LargeLlng (Lhlrddegree LargeLlng)
whlch relles on Lhe cusLomer Lo ldenLlfy hlmself
or herself by respondlng Lo Lhe flrms offers
llrsLdegree LargeLlng ls Lhe mosL deslrable buL
ln some lndusLrles lL ls dlfflculL Lo employ cosL
CusLomer 8eLenLlon
unlL lll (2)
SLages of reLenLlon ln cusLomer llfe cycle
AcqulslLlon cusLomers are acqulred for an organlzaLlon's buslness
8eLenLlon reLalnlng Lhe cusLomer from brand swlLchlng
ALLrlLlon process of gradually weavlng down
uefecLlon process of changlng brands
8eacqulslLlon cusLomer belng reacqulred for organlzaLlon's buslness
SLages of acqulslLlon
ulssaLlsfacLlon SaLlsfacLlon
8eLenLlon LoyalLy
1hls dlagram exhlblLs only Lhe normally expecLed move of Lhe
1here are excepLlons
Lg A saLlsfled cusLomer need noL move Lo reLenLlon lf he feels
LhaL Lhe compeLlLor's offer would glve more value for Lhe
money he spends
A dlssaLlsfled cusLomer need noL move Lo aLLrlLlon because of
several facLors llke
lorced cholce
personal reasons
unwllllngness Lo assume rlsk of brand swlLchlng
WhaL ls cusLomer reLenLlon ?
rocess of keeplng cusLomers ln Lhe cusLomer lnvenLory for an
unendlng perlod by meeLlng Lhe needs and exceedlng Lhe
expecLaLlons of Lhose cusLomers
Approach of converLlng a casual cusLomer lnLo a commlLLed
loyal cusLomer
CusLomers come Lo Lhe organlzaLlon ln one of
Lhe followlng ways
CusLomer by chance
CusLomer by occaslon
CusLomer by cholce
CusLomer by repeLlLlon
CusLomer by lnslsLence
CusLomer by loyalLy
8eLenLlon organlzaLlonal efforL Lo converL a cusLomer
by chance Lo a cusLomer by loyalLy
LoyalLy v/s 8eLenLlon
LoyalLy arlslng from reLenLlon ls preferred Lo loyalLy of
relucLanL cusLomers
8elucLanL cusLomer shows spurlous loyalLy or arLlflclal loyalLy
forced by varlous facLors llke
llmlLed lncome
llmlLed supply
nonreLalned cusLomers may opL for shared loyalLy whlch ls
AdvanLages of reLenLlon
1 CosL of servlng reLalned cusLomers ls less compared Lo
servlng fresh cusLomers every Llme
2 8eLalned cusLomers spread poslLlve lmage of Lhe
organlzaLlon by word of mouLh
3 1hls leads Lo acqulrlng new cusLomers
4 8eLalned cusLomers are less prlce senslLlve
Some sLaLlsLlcs
lL cosLs 3 Llmes more Lo aLLracL new cusLomers Lhan keeplng
exlsLlng ones saLlsfled
6070 probablllLy of selllng Lo exlsLlng cusLomers
2040 probablllLy of selllng Lo lapsed cusLomers
320 chance of selllng Lo a prospecL
91 unhappy cusLomers wlll never buy agaln from you
Wlll volce hls dlssaLlsfacLlon Lo 7 oLher people
ulfferenL approaches
1 locus ls on acqulrlng Lhe
2 locus on demographlc and
psychographlc proflle
3 CusLomer malnly drlven by
offer lncenLlves
1 locus ls on nurLurlng Lhe
2 locus on pasL presenL
LransacLlonal proflle
3 urlven by Lype exLenL of
relaLlonshlp malnLalned
A sLage ln whlch Lhe cusLomer for varlous reasons
beglns Lo quesLlon hls conLlnued paLronage wlLh Lhe
producL or servlce or Lhe provlder of Lhe producL or
ALLrlLlon lf noL arresLed mlghL lead Lo defecLlon
ALLrlLlon slgnals
lncrease ln Lhe number of complalnLs
uecrease ln Lhe frequency of conLacLs
uecrease ln personal vlslLs
uecrease ln enqulrles
uecrease ln Lhe volume of buslness
uecrease ln Lhe number of acLlve buyers
uecrease ln Lhe flow of communlcaLlon
Pandllng complalnLs Lowards lmprovlng reLenLlon
vlew complalnLs as opporLunlLles glven by cusLomers Lo work
Lowards valueadded performance
MosL cusLomers do noL reglsLer complalnLs
Less reglsLraLlon of complalnLs ls noL Lo be Laken as an
lndlcaLor of effecLlve performance
Should be more careful of unexpressed or unreglsLered
complalnLs compared Lo expressed or reglsLered complalnLs
CusLomers who do noL reglsLer complalnLs [oln Lhe process of
aLLrlLlon more qulckly Lhan who reglsLer
ComplalnLs Lhelr lmpacL on reLenLlon
1 ComplalnLs expressed resolved more chances of
2 ComplalnLs expressed buL noL resolved llkely Lo move Lo
aLLrlLlon process
3 ComplalnLs noL expressed buL resolved hlgher chances of
4 ComplalnLs noL expressed and noL resolved probablllLy of
defecLlon ls more
Caps reLenLlon
ercepLual gap whaL Lhe buslness Lhlnks a cusLomer
wanLs and whaL Lhe cusLomer acLually
rocedural gap whaL Lhe buslness provldes and whaL Lhe
cusLomer acLually recelved
romoLlonal gap whaL ls communlcaLed by Lhe organlzaLlon
and whaL has reached Lhe cusLomers
oslLlonal gap whaL Lhe organlzaLlon percelves ln lLs
poslLlonal sLraLegy and whaL has reached
Lhe cusLomers
needs classlflcaLlon
aslc needs fulflllmenL leads Lo Lhe sLage of
[usL saLlsfled"
ArLlculaLed needs fulflllmenL leads Lo Lhe sLage of
more saLlsfled"
LxclLlng needs saLlsfled more Lhan hls
need fulflllmenL reLenLlon
1 Speclflc needfulflllmenL cusLomer reLenLlon
2 Speclflc neednoL fulfllled aLLrlLlon
3 no preferred needbuL fulfllled aLLrlLlon/defecLlon
for Llme belng
4 no preferred need noL fulfllled aLLrlLlon/defecLlon
CusLomer saLlsfacLlon
ueflnlLlon SLaLe of mlnd LhaL occurs when Lhe
cusLomer feels LhaL hls requlremenL ls
fulfllled by whaL ls offered by Lhe
ComponenLs of ulLlmaLe saLlsfacLlon
1 roducL saLlsfacLlon covers Langlble core beneflLs
2 erlpheral saLlsfacLlon ln addlLlon Lo core beneflLs(adds value)
3 Amblence saLlsfacLlon blend of Langlble lnLanglble
4 sychlc saLlsfacLlon ln Lune wlLh lndlvlduallLy personal
LralLs of Lhe cusLomers
Levels of saLlsfacLlon cusLomer expecLs
1 LxpecLed saLlsfacLlon musL be" condlLlon
Absence leads Lo dlssaLlsfacLlon
2 ueslred saLlsfacLlon referred condlLlon"
resence or absence does noL
affecL level of saLlsfacLlon
3 LxclLlng saLlsfacLlon surprlslng aLLracLlve performance"
resence wlll add Lo level of
leaLures of reLenLlon cenLered organlzaLlons
1 Learnlng organlzaLlonslearnlng from Lhe vlewpolnL of cusLomers
2 A markeL leader raLher Lhan belng a follower
3 Much more lnnovaLlve ln overall approach
4 uevelop effecLlve cusLomer care program
3 LffecLlve complalnL managemenL sysLem
6 uevelop Lhe culLure of LoLal employee lnvolvemenL
7 lormulaLe buslness sLraLegles LhaL are cusLomer cenLrlc
8 Mechanlsm Lo Lrack aLLrlLlon slgnals as early as posslble
9 locus aLLenLlon on former losL cusLomers
10 racLlce LoLal quallLy markeLlng and emphaslze on lnLernal markeLlng
11 Lncourage employees Lo acLlvely llsLen Lo cusLomer grlevances
12 8esearch on cusLomer relaLed problems
13 Lncourage regular cusLomer conLacL programs
14 Lmpower employees aL varlous levels
13 uevlaLe from LradlLlonal we make lL you Lake lL model Lo you need lLwe
make lL" model
uaLabase MarkeLlng
otobose motketloq ooly wotks to bollJ
teteotloo lf tbe costomet beoeflts ftom tbe
teteotloo sttoteqles
lL works lf Lhe cusLomer says Lo herself l'm
glad LhaL l'm on LhaL daLabase because 1he
company runnlng Lhe daLabase has Lo
compleLe Lhe senLence by deslgnlng and
runnlng programs LhaL capLure Lhe loyalLy of
Lhelr cusLomers
varlous reLenLlon sLraLegles
Membershlp cards and membershlp programs
Welcome and Lhank you communlcaLlons
SaLlsfacLlon surveys followed up by phone
calls and leLLers
eefed up cusLomer servlce empowered Lo
solve problems
Lnhanced Lechnlcal supporL wlLh follow up
saLlsfacLlon calls
lrequenL buyer programs whlch permlL
cusLomers Lo bulld up equlLy
LvenL drlven communlcaLlons LhaL are
meanlngful Lo Lhe cusLomers' llves
uaLabases LhaL keep Lrack of cusLomer's
purchases preferences complemenLs and
complalnLs whlch are used Lo carry ouL loyalLy
bulldlng servlces and dlalogs
lnLegraLed markeLlng programs where Lhe
adverLlslng dlrecL communlcaLlons cusLomer
servlce daLabase markeLlng and sales
programs are all orchesLraLed LogeLher and
deslgned Lo bulld loyalLy
SegmenLaLlon of Lhe cusLomer base by
llfeLlme value groups and dlfferenL markeLlng
programs deslgned for each segmenL
SegmenLaLlon of Lhe cusLomer