CHAPTER 4

CREATING CUSTOMER
VALUES AND CUSTOMER
RELATIONSHIP
BY
D.SANTOSH
NEERAJ MAKIJA
SWAGAT KUMAR DASH
ABHINAV
RAVI SHANKER
NIKITA
SIMMY S NIGAM
Indian Institute of Management
Raipur

MIDDLE
MANAGEMENT
TOP
MANAGEMENT

FRONTLINE
PEOPLE

CUSTOMER

Indian Institute of Management

Raipur

 Customer perceived
Value = Cost of an
offering benefits
achieved through offering
Total customer benefit =
monetary value of economic,
functional and psychological
benefits of offering
Total customer cost = cost (money, time, energy, etc)
incurred by the customer for procuring, maintaining
and disposing the offering
Eg: Experience of Buying, Maintaining and selling a car
Indian Institute of Management
Raipur

HIGH
CUSTOMER
VALUE

TOTAL
CUSTOMER
SATISFACTION

LOYALTY

VALUE
PROPOSITION
Indian Institute of Management
Raipur

VALUE DELIVERY
SYSTEM
4

MONITORING SATISFACTION
Hiring mystery shoppers
Periodic surveys
Customer complaint monitoring

Indian Institute of Management

Raipur

Customer Satisfaction &

Net Promoter Score(NPS)

Would Customer recommend the product to his friend

or colleague depends upon how customers
experience has been.

Customers are asked to rate the likelihood to

recommend the product on a 0-10 point scale.

0-6 range customers (detractors) are subtracted from 910 customers (promoters).
Indian Institute of Management
Raipur

Impact of Quality
Product
Quality

Customer
Satisfaction

Indian Institute of Management

Raipur

Company
Profitability

Product and Service

Quality
Satisfaction hugely depends upon quality.
Quality - fitness for use.
- conformance to requirements.
- freedom variation.

Indian Institute of Management

Raipur

Customer Profitability
A profitable customer is that person or household which
over the time yields a revenue stream exceeding the
companys cost stream for serving the customer by an
acceptable amount.
Stress is on the lifetime stream of revenue & cost and not
on profit from a particular transaction.

Indian Institute of Management

Raipur

Customer Lifetime Value

80:20 Philosophy
Tool to maximize profitability
CLV = Expected revenue Expected total
cost

Indian Institute of Management

Raipur

10

Customer Profitability
analysis

By Accounting based costing (ABC)

ABC = Revenue from customer All costs
incurred

Indian Institute of Management

Raipur

11

Customer Relationship
Management

FMCG marketers for rural relations

Customer touch point

Indian Institute of Management

Raipur

12

Personalizing marketing

Poor effectiveness in the mails from GE

plastics to different customers
Poor Customization of computer ordering

Indian Institute of Management

Raipur

13

Effect of Social media

HIPPO Twitter campaign by Parle Agro :

To fulfill stock at retail shops

Ezone Twitter campaign : To improve

product, promotions, displays

Indian Institute of Management

Raipur

14

Building Relations with

Rural Consumers
Lack of Technological Infrastructure,
Markets should approach, take interest and
build relations with Rural consumers
Eg SBI started DBI Tiny scheme with 0
balance with minimum deposit mount of
Rs 5 through which SBI could evolve
opportunities to offer loans and insurance
to same customers

Indian Institute of Management

Raipur

15

E-commercials
Eg- dominos Has introduced to build your owm pizza
so that customer can choose size, sauce and toppings etc.
So that system improved accuracy increase repeat visit
and boosted revenue.

Indian Institute of Management

Raipur

16

Personalisation
Permission marketing- By respecting customer wishes
and sending messages only when they express a
willingness to become more involve with the brand
One to one marketing
Identify your customer
Differentiate customer on the basis of neds and value
Interaction
Customisation

Indian Institute of Management

Raipur

17

Empowerment review
and recommendation

Pantene had created a campaign to encourage women to

cut their hair and donate the clippings to make wigs for
cancer patients.

Indian Institute of Management

Raipur

18

Attracting and retaining

customers

Reducing defection
Retention dynamics
Managing customer base
Building loyalty

Indian Institute of Management

Raipur

19

CUSTOMER DATABASES AND

DATABASE MARKETING
DATABASES: Include information related to
customers(Names, address, transactions, preferneces
etc)
DATABASE MARKETING: Utilization of database to
analyze customers and their preferences and offer
products accordingly
Example: Hotels, Restaurants can offer services based
on the customers previous preferences

Indian Institute of Management

Raipur

20

DATA WAREHOUSES AND DATA

MINING
Data collected is organized and stored in Data
Warehouse for further analysis
Data Mining involves extracting useful information
from a huge mass of data

Indian Institute of Management

Raipur

21

USE OF DATABASES
Identify prospects and converting them into
customers
Customization of offers based on customers
preferences
Deepen Customer loyalty by remembering
preferences and offering gifts, discounts etc
Reactivate Customer purchase through automated
birthday, anniversary etc mails
Avoid serious customer mistakes- Wrong actions for
wrong customers( Like levy of penalties on
influential customers)
Indian Institute of Management
Raipur

22

Downside of Database marketing

and CRM
Unsuitable situations like once in a lifetime product,
loyal customers, or when the cost of gathering
information is high
Maintenance of the hardware and software
infrastructure is expensive
Difficult to make everyone customer oriented and use
of available information
Not all customers want a relationship with the
company
Assumptions behind CRM may not always be true
Indian Institute of Management
Raipur

23

THANK YOU!!

Indian Institute of Management

Raipur

24