CUSTOMER VALUE &

SATISFACTION:
Noorulhadi
Lecturer GCMS Peshawar

DEFINING CUSTOMER VALUE AND

SATISFACTION
What is customer Value :
It is the difference between the prospective customers evaluation of all the
benefits & all the costs of an offering and the perceived alternatives
Total Customer Value:
Perceived Value is combination of economic , functional and psychological
benefits
Total Customer Cost:
Bundle of costs customer incurs in evaluating, obtaining, using & disposing
market offering

DETERMINA
NTS OF
CUSTOMER
DELIVERED
VALUE

CUSTOMER VALUE

Customers seek to maximize value by

estimating which offer (product/firm) delivers the most value (CPV)
forming an expectation of value and acting upon it (purchase)
evaluating their usage experience against the expectations
Satisfaction results when expectations are equaled or surpassed

SUPERIOR VALUE DELIVERY

1.

Reliance Infocomm

2.

Dell Computers

3.

Xerox Copiers

4.

McDonald's

5.

Nike

6.

Oakley Shades

7.

Asian Paints

CUSTOMER SATISFACTION
Satisfaction is a persons feelings of pleasure or disappointment
resulting from comparing a products perceived performance in
relation to the expectations
Consumer Expectations:
Past Buying Experiences
Friends & Associates advice
Competitor's Information and Promises

OBJECTIVE

VALUE CREATION
AND
DELIVER HIGH CUSTOMER
VALUE

CREATION & DELIVERY

1.

Value Selection

2.

Value Creation

3.

Value Communication

4.

Value Enhancement

VALUE SELECTION & CREATION

Value Proposition:
Whole cluster of benefits the company promises to deliver
Value Chain
Value chain is a synthesis of activities that are performed to design , produce,
market, deliver, and supports its products

creating activities consisting of Five

primary activities & Four support
activities

Nine Value

DELIVERING CUSTOMER VALUE AND

SATISFACTION

Smooth Management of Core Business Process

Core Business Processes:
The market sensing process : Marketing Intelligence
The new offering realization process: Researching,
Developing & Launching
The customer acquisition process: Defining Target Markets &
Prospecting
The Customer Relationship Management Process: Building
understanding, relationships & offerings
The fulfillment management process: Receiving & Approving
orders, shipping the goods on time & collecting Payment

ATTRACTING AND RETAINING CUSTOMERS

Attracting Customers:
Suspecting
Prospecting & Targeting
Conversion
Computing the Cost of Lost Customers
Customer churn
Lifetime value

THE
CUSTOMERDEVELOPME
NT PROCESS

ATTRACTING AND RETAINING CUSTOMERS

The Need for Customer Retention:
New Product Introductions
Positive WOM
Brand Messenger
Low Attention to competing Brands
Less Sensitive to Price
Measuring Customer Lifetime Value (CLV) :
Present value of Stream of Future profits expected over customers lifetime
purchases

RELATIONSHIP MANAGEMENT
Move from a transactional model of
marketing to a relationship model
Advocate
Supporter

Emphasis
on new
Customers
customers
(customer
catching)

Client
Customer
Prospect

Source: Christopher et al (1991)

Emphasis
On
on
developing
and
Enhancing
enhancing
relationships
(customer
keeping)

WHAT IS CRM?

CRM is adopting customer-centric business

strategies, implementing these strategies by
changing how customers do business and how
people do work and then enabling new strategies,
new customer interactions and new workflow by
providing appropriate technology support

ALLOCATING MARKETING INVESTMENT

ACCORDING TO CUSTOMER VALUE