5

Creating Customer Value,

Satisfaction,
and Loyalty

Marketing Management, 13th ed

 Figure 5.1 Organizational Charts

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 Figure 5.2 Determinants of
Customer Perceived Value

Total customer benefit Total customer cost

Product benefit Monetary cost

Services benefit Time cost

Personal benefit Energy cost

Image benefit Psychological cost

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 What is Loyalty?

Loyalty is a deeply held commitment to

re-buy a preferred product or service in
the future despite situational influences
and marketing efforts having the
potential to cause switching behavior.

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 The Value Proposition

The whole cluster of

benefits the
company promises
to deliver

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 Measuring Satisfaction

Periodic
Periodic Surveys
Surveys

Customer
Customer Loss
Loss Rate
Rate

Monitor
Monitor Competitive
Competitive
Performance
Performance

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 What is Quality?

Quality is the totality of features and

characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.

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 Maximizing Customer Lifetime Value

Customer
Profitability

Customer Lifetime
Equity Value

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 What is Customer Relationship
Management?

CRM is the process of carefully

managing detailed information about
individual customers and all customer
touchpoints to maximize
customer loyalty.

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 Framework for CRM

Identify prospects and customers

Differentiate customers by needs

and value to company

Interact to improve knowledge

Customize for each customer

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 Database Key Concepts

• Customer • Business
database database
• Database • Data warehouse
marketing • Data mining
• Mailing list

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 Using the Database

To
To identify
identify prospects
prospects

To
To target
target offers
offers

To
To deepen
deepen loyalty
loyalty

To
To reactivate
reactivate customers
customers

To
To avoid
avoid mistakes
mistakes
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