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Customer Satisfaction

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Organizational Charts

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What is Customer Perceived Value?

Customer perceived value is the difference

between the prospective customers

evaluation of all the benefits and all the costs

of an offering and the perceived alternatives.

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Determinants of

Customer Perceived Value

Image benefit Psychological cost

Personal benefit Energy cost

Services benefit Time cost

Product benefit Monetary cost

Total customer benefit Total customer cost

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Delivered COST

Price +

Service +

Spare parts +

Labor +

Small Brand

o

Delivered VALUE

o Features +

o Utility +

o Attractiveness +

o Brand Value &

Loyalty

Net Delivered Value = Delivered Value Delivered Cost

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+ (Positive)

Satisfied Customer Loyal to Brand

Lesser complains

Edge over theCompetitors

- (Negative)

Dis-satisfied Customer

Change the Brand

Negative sales trend

More complains

Decreasing Brandloyalty

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Steps in a Customer Value Analysis

Identify major attributes and benefits thatcustomers value

Assess the qualitative importance of

different attributes and benefits Assess the companys and competitors

performances on the different customervalues against rated importance

Examine ratings of specific segments

Monitor customer values over time

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The Value Proposition

The whole cluster of

benefits thecompany promises

to deliver

http://www.volvo.com/

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S

A

T

I

S

F

I

E

D

D

I

S-

S

A

T

I

S

FI

E

D

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What is Loyalty?

Loyalty is a deeply held commitment to re-buy

or re-patronize 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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Maximizing Customer Lifetime Value

Customer

Profitability

CustomerEquity

LifetimeValue

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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 needsand value to company

Interact to improve knowledge

Customize for each customer

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CRM Strategies

Reduce the rate of defection

Increase longevity

Enhance share of wallet

Terminate low-profitcustomers

Focus more effort on high-

profit customers

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Track your customers

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Investors

Employees

Creditors & Suppliers

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Focuson

CRM

http://www.enterprise.com/

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Customer Retention

Acquisition of customers can cost five times more

than retaining current customers.

The average customer loses 10% of its customers

each year. A 5% reduction to the customer defection rate can

increase profits by 25% to 85%.

The customer profit rate increases over the life of aretained customer.

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The Customer

Development Process

Prospects

Suspects

Disqualified

First-time

customersRepeat

customersClients Members

PartnersEx-customers

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Database Key Concepts

Customer database

Database marketing

Mailing list

Business database

Data warehouse

Data mining

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Using the Database

To identify prospects

To target offers

To deepen loyalty

To reactivate customers

To avoid mistakes