chapter

Customer Relationships
McGraw-Hill/Irwin 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Customer Relationships Todays Objectives



Objectives will be to: Develop a clear definition of relationship Explore why firms want relationships with their customers Discuss the relationship stages and interaction intensity Examine the effects of the Internet and 2Is on customer relationships Discuss some final points about customer relationships and the Web

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Relationship Type & Involvement Continuums

Enduring Involvement

Exchange Relationships

Communal Relationships

Situational Involvement

Exhibit 6.2: A Continuum of Relationship Involvement

High
Product type (cost, level of symbolism, risk)
Automobile 35-mm Camera Expensive Watch Stereo Component Eyeglasses Scotch Whiskey Hair Coloring Wine for Dinner Party Washer/Dryer Face Soap Credit Card Salad Oil Deodorant Soap Insecticide Headache Remedy Liquid Bleach Insect Repellent Disposable Razor Potato Chips Soft Drink Paper Towels Toilet Tissue

Purchase situation (visibility, social acceptability)

Relationship Involvement

Consumer type (interests, values, attitudes)

Low

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Exhibit 6.4: Length of Customer Tenure and Profitability Relationship

Profitability

Low

High

Short

Long

Customer Lifetime

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Exhibit 6.6: Moving Through the Relationship Stages

Awareness

Exploration/ Expansion

Commitment

Dissolution

Customers can advance through the stages in several different ways

Exhibit 6.7: Two Alternatives for Customers at the Commitment Stage

Satisfied, profitable customers

Stay Committed

Commitment

Unsatisfied or unprofitable customers

Dissolution

Customers can either stay committed or move to dissolution

Exhibit 6.10: Level of Interaction by Stage of Customer Relationships

Four Key Stages of Customer Relationships
Exploration / Expansion

Awareness

Commitment

Dissolution

Level of Intensity

Level of Intensity

Intensity

Stages of Customer Relationships

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Are Interactivity and Individualization Always Necessary?

Low Individualization, Low Interactivity Example: news service Low Individualization, High Interactivity Example: library

High Individualization, Low Interactivity Example: bank statement

High Individualization, High Interactivity

Exhibit 6.12: Online Privacy Attitudes

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Exhibit 6.13: Integrative Framework: Building Relationships on the Web

Four Key Stages of Customer Relationships

Awareness

Exploration/ Expansion

Commitment

Dissolution

Price Marketing Levers Product Promotion Distribution

Brand

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web EBay Case Study Conclusion

Building Relationships at EBay

Four Key Stages of Customer Relationships

Awareness

Exploration/ Expansion

Commitment

Dissolution

No. 1 general auction service on the Internet

EBay encourages browsing before registration for the purpose of exploration

EBay offers (1) community, (2) individualization, and (3) interaction

Users can stop buying or selling at any time

Chapter 6: Customer Relationships



Defining Relationship Why Firms Want Relationships With Their Customers The Relationship Stages and Interaction Intensity The Effects of the Internet and the 2Is on Customer Relationships Some Final Points About Customer Relationships and the Web eBay Case Study Conclusion

Customer Relationships Conclusion



The customer relationship stages are:

1.

Awareness The customer recognizes that the firm is a possible exchange partner, but has not initiated any communication with the firm or purchased its products Exploration The customer considers the possibility of exchange, gathers information and perhaps initiates trial purchases Commitment The parties in a relationship feel a sense of obligation or responsibility toward each other Dissolution This stage signals the separation of buyer and seller the loss of connection

2.

3.

4.

The Internet allows firms to interact and to individualize in powerful ways. As a result, firm-customer relationships can be formed and can progress very quickly Firms dont always want a relationship with all customers . . . and vice versa