Handouts 3- Value of Customer and Differentiate Strategic and Marketing

Planning
Customer loyalty is founded on excellent customer services. The creation of customer
value does not rely on marketing alone. It compasses other functions such as sourcing,
operating, processing, communication, human resource services, administration, finance and
accounting.
Building Customer Value
Customer value is defined as the satisfaction derived from what a customer may
experience or expect by choosing a particular action relative to the cost of that action.
The action can be a purchase, a visit, an order, or a sign up. The cost refers to anything
that can be given up to receive the desired product or service which can be in the form
of money, time, knowledge, data or others.
Levels of Customer Value. The levels of customer value indicate what the consumer
expect and do not expect from their purchases.
Basic and expected levels. These levels include the basic requirements of conducting
a business. For instance, restaurants are expected to have a spacious dining area and
clean tables and utensils. If these requirements are not met by the business, it cannot
provide high quality customer value.
Desired customer value. This involves what the customers want from the purchase or
service experience. This is the first opportunity for a business to get ahead of the
competition. For example, a retail shop can provide friendly and helpful staff who can
assist the customers in making the right choices.
Unanticipated customer value. It pertains to an unexpected purchase or service
experience that may go beyond what the customers desire. For example, in a gasoline
station, the gasoline boy cleans the window after filling up the customer’s gasoline tank
without an extra charge.
Types of Customer
There are four types of customers based on projected customer retention and loyalty to the
brand.
Strangers – are customers whose needs do not fit the company’s offerings. The
company does not need to invest and exert effort to win them.
Butterflies-as the name implies, are not loyal to specific brand because they keep on
looking for the best deals which may lead to patronizing other brands. The company can
enjoy profits from these customers only for a short period.
True friends- have needs that match the company’s offerings. They make repeat
purchases and patronize the brand as long as it satisfies their needs. The company must
invest in these customers and strengthen its relationship with them.
Freeloaders- are loyal but not profitable because of the limited fit between their needs
and the company’s offering. For example, a few customers of a salon patronize its
services regularly but do not generate enough profit to sustain the maintenance costs, it
can earn only if it raises the prices of its services.
Relationship Development Strategies
Recent research shows that loyal customers prove to be more profitable than ordinary
customers. This is the reason why companies are challenged to maintain customer loyalty.
Companies should practice the following relationship development strategies to retain loyal
customers:
1. Communicate with customers frequently and effectively. It is important to always
get in touch with customers through e-mail and social networking sites especially in the new
normal situation. Provide various means to give immediate feedback (e.g., online customer
surveys).
2. Offer customer rewards. Customer loyalty programs, which include special
discounts, freebies, perks, may work well for various types of products and services. These
encourage customers to remain loyal to the brand because they are rewarded for their
patronage.
Handouts 3- Value of Customer and Differentiate Strategic and Marketing
Planning
3. Conduct special events and provide sponsorship. Companies can hold or sponsor
parties, concerts, contests, and the like to boost interaction among loyal customers and
company representatives.
4. Enhance customer service. Some company outsource their services to third party
organizations to cater complaints and inquiries, promote their latest offerings and provide
technical support.
5. Utilize languages to reach a wider customer base. Marketers can create
promotional materials in different languages to cater specific regions. Consumers can also now
choose the language they would like to use to communicate with customer service
representative.
Customer Service in the Philippine Business Enterprise
The success of our homegrown companies lies not just on their offerings but also on
their customer service. Local business now utilizes customer service tools that fit our customer-
oriented culture and extensive technology usage.
1. Email and SMS – also help businesses communicate with their clientele more easily
as most consumers regularly check their inboxes.
2. Social Networking sites – aside from their primary function of connecting people,
have become a channel for netizens to ask for customer support. Telecom Companies promptly
responds to inquiries and complaints on social media and redirects the customer to the site’s
private messaging system for further assistance.
3. Live chat support – facilitates real time correspondence between customer and the
company representative.

Tasks
Activity 1 Caselet
Nike + and the Active Lifestyle In 2010, the global sports brand Nike developed
technologies that allow users to live an active lifestyle and keep track of their performance in
their respective sports. Nike organized a Digital Sport division which created applications that
help its customers maintain in active life. Nike also launched an online platform, Nike+, where
users can sign up to access various applications. Two of the popular applications in the Nike+
platform are Nike+ Training Club and Nike Run Club. The Nike+ Training Club serves as an
online personal trainer. It features more than 100 workout videos of Nike trainers and athletes.
The application can also create a personalized training plan adapted to the user’s lifestyle. The
Nike+ Run Club helps users engaged in the running lifestyle prepare for races and track their
progress. The application provides accurate details about pace, distance, routes, and personal
records. Users also get personalized coaching and are able to share their training journeys with
fellow runners.
Discussion Questions
1. How do Nike+ applications help customers maintain an active lifestyle?
2. In what way will the fitness applications help Nike’s+ sales performance?
3. What values are being upheld by the company through these applications?
4. Do you see these applications reinforcing the relationship between Nike and its
customers? Explain.
Activity 2
Directions. Write a short reflection on your activity notebook.
What is the value of customer to you? Narrate your personal experience indicating what you
expect as a customer and indicate what level of customer value where you are at that time.
Handouts 3- Value of Customer and Differentiate Strategic and Marketing
Planning
Activity 3
Directions: Read and understand the following questions. Write your answers on your activity
notebook.
1. How should a company prepare its marketing efforts for effective customer service?
2. Explain briefly the relationship development strategies by giving of examples.

PETA

Directions. Give what is asked and write your answers on your activity notebook.
Select five persons in your family and ask them to talk about the value of their mobile phones
and their satisfaction with them. Compare their answers and from the perspective of a cell
phone company’s marketer, develop five marketing strategies based on their feedback.
Rubrics