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CANTO 2008
Maximizing Customer Value
Building Loyalty
Introduction
• Robert W. Fordon
• Xelex Technologies Inc.
• Maximizing customer value
building loyalty
• Successful businesses typically see 80 percent of their business come
from 20 percent of their customers
• The cost to attract new customers is significantly more than to maintain
your relationship with existing ones, your efforts toward building
customer loyalty will certainly pay off.
Training
Overview
Incentives
Product Awareness
Reliability
Flexibility
People / Technology
Know Your Customers
Employee Loyalty
Customer Service
Communication
Vocabulary
• Customer loyalty - the tendency of
a customer to choose one
business or product over another for
a particular need or preference.
• Value proposition - what the
customer gets for what the
customer pays.
Customer Value
• Accordingly, a customer can evaluate a
company's value-proposition on two
broad dimensions:−relative performance: what the customer
gets from the vendor relative to a competitor's offering;
−price: The total cost which consists of the payment the customer makes to acquire the product or service; plus the access cost
Customer Value
• Higher buying rates and lower
service costs make long-term
customers more valuable (Lifetime
Value).
Customer Value
• The lifetime value of a customer is a measure of
the value of the customer to your business. − It is the potential contribution of the customer to your
business over a period of time. − When you know the lifetime value of a customer, you
have a benchmark for how much you would or should be willing to invest to acquire a customer.
Customer Value
• The calculation of customer-lifetime value (LV)
must take three factors into account: − margin (the annual revenue that customers generate
minus the operating expenses a company incurs in serving them)
− retention rate (the percentage of customers expected to keep doing business with the company)
− discount rate (the current cost of capital). The resulting dollar figure can yield a variety of insights.
How to achieve Customer Loyalty
Training
Incentives
Product Awareness
Reliability
Flexibility
People / Technology
Know Your Customers
Employee Loyalty
Customer Service
Communication
Customer Relationship Management
• Customer relationship management has to do
with any methods, policies, and procedures
that are utilized by a company to provide:− A high level of customer care to existing
customers.−Orient new customers to the products and services
offered by the business. −Encourage general customer retention.−Tools for customer analysis and CSR rapid
response.
Customer Relationship Management
• Generally, competent customer relationship
management involves providing customer
assistance on a variety of levels:− Operational− Collaborative − Analytical
Check Points
• Do you have a mission statement?
• Talk with your CSRs−Do they know your mission statement?−Know your product/service offerings?−Employee loyalty?−What are the problems/issues?
• Internal• Customer
Check Points
• Call your customer service line.
• Can you accurately tell your
customer’s opinion of your
company?−Talk to your customers