Learning Area PRINCIPLES OF MARKETING Grade Level 11

W4 Quarter 3 Date

I. LESSON TITLE Customer Relationship: Customer Service

II. MOST ESSENTIAL LEARNING
COMPETENCIES (MELCs) The learners shall be able to explain the value of customers.
(ABM_PM11-1c-d-6)

III. CONTENT/CORE CONTENT The learners demonstrate an understanding of the value of customer relations
and customer service.
References:
Real C. So and Oscar G. Torres, DepEd Principles of Marketing Textbook, pp.15-21
Real C. So and Oscar G. Torres,DepEd Principles of Marketing Teacher’s Manual pp.13-17
Suggested
IV. LEARNING PHASES Learning Activities
Timeframe
A. Introduction In our previous lesson, you have learned the importance of creating strong
Panimula customer connections to build customer loyalty and long-term relationships.
This week, you will learn more about the value of customers.

At the end of this lesson, you are expected to:

1. explain the value of customers
2. demonstrate how to measure customer lifetime value (CLV)
3. realize the importance of customer value to make buying decisions

20 mins Before we begin, let us know your point of view on why customers matter.

Activity 1: Customer Matters

Directions: In your notebook, write your opinion on what is likely to happen to

the organization when the following events happen. Write it in your notebook.
1. When an organization does not pay attention to what the customer
wants.
2. When an organization does not really understand who its customers
are.
B. Development The customer is the cornerstone of marketing. Businesses live, bloom, or perish
Pagpapaunlad based on their ability to offer value to customers through the exchange process.
The exchange process is the act of obtaining a desired object from someone by
offering something of value in return. All marketing centers on creating,
delivering, and communicating value to the customer. In other words, the
customer is the primary reason for a business to exist.

Who are our Customers?

“Customers” are the people or organizations with needs or wants that a business
aims to address. They are the lifeblood of any business. They create demand
and do purchases or avail services. They have varying needs and preferences.
They wield tremendous influence over other people. A satisfied customer shares
50 mins. his experiences with relatives and friends that can result in additional sales and
consumers. Same with dissatisfied customers, his experiences will dissuade other
people from purchasing the product. Moreover, it can become a cause of
concern when the customer vents his dissatisfaction to social media which has
the tendency to magnify these negative experiences.
As you know, a business's end goal is to acquire and keep customers to be able
to cover their manufacturing costs, operating expenses, and generate profits. In
addition, it has to be maintainable that products or services are expected to be
purchased continuously and repeatedly to stand profitable and sustainable
operations.

Marketers cannot force the customers to buy any product or service that the
company offers. Instead, customer needs and wants must be understood,
anticipated, and satisfied adequately and exceedingly. Once an individual
becomes a customer, everything must be done to ensure that the customer is
kept and retained. Companies must predict and create customer needs since
there are other businesses that offer the same product or service to the same
customers. They need to outdo each other in terms of value offering. As
customers always ask the question: “what’s in it for me? Value offering is
communicating with customers the reasons “why” they would choose your
product or service over your competitors.

Customer Service
It is the process of ensuring customer satisfaction with a product or service.
Customer service has many forms. It can be product delivery, salesperson
assistance, technical advice, help desks, or other means. It includes activities
designed to increase customer satisfaction and the perception that a product
exceeded expectations. This perception is usually shaped and influenced by
the level and type of service that the customers experience before, during, and
after the actual purchase.

Good customer service prime customers to perceive the value offered as

superior over its competitors. This is because a customer not only buys a product
or pays for a service, but more of their entire purchase or shopping experience.
To know their product and the product of their competitors, as well, from the
point of view of their customers, they provide different customers’ feedback
platforms. In the Philippines, the value of customer service is evident. The boom
of call center companies and representatives is one example of giving customer
assistance about product information, customer preferences of needs and
wants, identifying and understanding customers, online transactions and/or
reservations, and many others.

We all make buying decisions every day. As customers, we all ask the same
question: Is what I am going to receive worth what I have to give up in order to
get it?
Activity 2: How Far Can Your Twenty Pesos Go?

Directions: For our next activity, ask your classmates or member of your
household the following questions:
1. What can they buy with their Twenty Pesos?
2. Are they satisfied? Why? Why not?

Customer Value
Customer value is the perception of the worth of satisfaction the customer
experiences or expects to experience from the product or service s/he paid for
versus the possible alternatives. It is the relationship between benefits and/or
services and the costs including money, time, and other factors to sacrifice that
are necessary to get those benefits.

Or in the simple mathematical equation: Benefits – Cost = Customer Value

The benefit the customer received is weighed against the cost s/he must pay to
acquire the benefit. The value the individual consumer places on a product or
service becomes the customer value for that offering. It is weighed against the
customer values assigned for similar products and services that would provide a
similar benefit. Typically, customers purchase items with the highest customer
value among all offerings in the marketplace. However, no two consumers
have the same customer value on the same product or service since each has
a unique set of needs, resources, and willingness to pay.

Creating customer value increases customer satisfaction and customer

experience which results in loyalty, market share, reduces errors, better
efficiency, and higher profits.

Creating more customer value

⮚ Understand what drives value for customers
⮚ Understand value proposition
 ⮚ Identify the customers and segment where the company can create
more value relative to competitors
⮚ Create a win-win price
⮚ Focus investments on the most valuable customers

Delivering Customer Value

Three (3) ways
a company can establish Provide customer with:
customer value to its
customers
1. the best cost.
2. the best product.
3. the best service.

Importance of Customer Value

1. It has become a mandate for 5. In choice-filled arenas, the

management. balance of power has shifted from
company to value-seeking customer.
2. It provides focus and direction for 6. Managing customer value is even
the organization ensuring more critical to organizations in the
exceptional value offering to new service and information-based
customers. economy.
3. It impels organizations to market 7. Todays’ customers are quite smart
leadership position in today’s highly and sophisticated. They are looking
competitive global markets for companies that create maximum
4. It is a key ingredient in building a value for them based on their needs
competitive advantage. and wants and demonstrate that
they value their business.
Customer Lifetime Value
C. Engagement Customer Lifetime Value (CVL) is the forecasted sales or profits that a company
can derive from the entire span of its future relationship with a particular
Pakikipagpalihan customer. It can be based on the potential and profitability of his relationship
with the company. It has several distinct implications:
● It ponders on a longer-term relationship with customers contrary to a
short-term view of “take the customer’s money and run.”
● It analyzes and equates the costs of acquiring new customers versus
keeping old ones.
● It is used to determine lost revenues when an existing customer shifts to
another product. Costs for getting new customers is called acquisition
costs, whereas, the cost for maintaining existing customers is called
retention costs. Normally, these are in the form of customer support and
promotional incentives.
● It highlights the importance of market segmentation recognizing that
35 mins. some customer groups are more profitable than others.

Customer Lifetime Value will give you an idea of whether or not you can expect
repeat customers. If their customer lifetime value is high, the chance of
retaining your customer to buy more of your products is also high. If not, they
were just mere passive, single-sale customers that you need to make extra effort
to repeat purchase.

CVL can be measured using the formula: CVL = (PV) (RP) (RT)
Where:
PV: is the average peso value of a sale to a particular customer
or customer group.
RP: is the repeat purchase in a year
RT: is the retention time in months or years
CVL: is the customer lifetime value

Let PV = ₽1,000.00
 RP = 12 (monthly) CVL = (PV) (RP) (RT)
RT = 10 = (1000) (12) (10)
CVL = ? = ₽120,000.00 (Customer Lifetime Value)

Activity 3: My Lifetime Value

Directions: Compute for the Customer Lifetime Value (CLV) of the following
situations. Write your answer in your notebook. (2points each)
1. For every visit of Mrs. Uzumaki in her favorite boutique she spends ₽50,000.00
once a month for an unexpected time period of ten years.
2. An executive officer spends ₽3,000.00 for his lunch once a week for a period
of five years.
3. Mr. Uchiha, an overseas employer, spends P200,000.00 for every package he
spends quarterly for an unexpected time period of seven years.
D. Assimilation Activity 4: List Me!
Paglalapat 20 mins. Direction: In your notebook, list things you can do to create value for your
customer.
V. ASSESSMENT Activity 5: Why and How?
(Learning Activity Sheets for Directions: Mr. Publilius Syrus, 1st century B.C., states: “Everything is worth what its
Enrichment, Remediation or 20 mins. purchaser will pay for it.” Discuss why and how his statement demonstrates
Assessment to be given on customer value. Write it in your notebook.
Weeks 3 and 6)

In your notebook, write your personal insight about the lesson using the prompts
VI. REFLECTION
below:
I understand that _________________________________________________.
5 mins. I realize that ______________________________________________________.
I need to learn more about _______________________________________.

Prepared by: Ma. Cristina F. Pabalate, SDO Imus City Checked by: Dr. Josephine P. Canlas, Adora G. Del Mundo,
Jeramie G. Buensuceso