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18/3/2003
What is a Customer?
“The customer is value-maximizer, within the bounds of search costs and limited knowledge, mobility and income.”
18/3/2003
Customer Value
Customer Delivered Value = Total Customer Value - Total Customer Cost
• What is Customer Delivered Value?
“ Is the bundle of benefits expected”
Customer Cost“ Is the bundle of costs expected”
18/3/2003
Customer Delivered Value
Total Customer Value Total Customer Cost
Product Value
Service Value
Personnel Value
Image Value
Money Cost
Time Cost
Energy Cost
Psychic cost
Determinants of Customer Delivered Value
18/3/2003
What are the factors that may hinder or stop the full implementation of the Customer Delivered Value System?
• The buyer might be under orders to buy at the lowest cost.
• Concentrating on the short-term benefits and over looking
long term costs.
• The effect of the Relation between the sales persons and the consumer.
18/3/2003
What is Satisfaction?
• It is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.
Satisfaction = function (perceived performance /expectations)
18/3/2003
What are the tools for tracking and measuring Customer Satisfaction
• Complaint and Suggestion system
• Customer Satisfaction Surveys
• Ghost Shopping
• Lost Customers Analysis
18/3/2003
Benefits of Highly Satisfied Customer
• Stays Loyal Longer
• Buys more
• Talks favorably about the company
• Offer products and services ideas to the company
• Costs less to serve than new customer
18/3/2003
Why retain Customers?
• Acquiring a new customer costs 5 times retaining an old one.
• The average company loss about 10% of its customers annually
• Customer rate increase with time.
18/3/2003
What are the types of marketing?
• Basic Marketing: selling the product• Reactive Marketing: selling the product
and encouraging further contact• Accountable Marketing: Follow up on
Customers satisfaction.• Proactive marketing: involving customers
in product and company improvements• Partnership marketing: encouraging the
customer to become a stakeholder in the company