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Chapterfo
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tions
of ChapterM A R K E T I N G
Ensuring Total Customer Satisfaction and Managing Customer Relationships
6
Chapter
Objectives
1. Explain the importance of striving for total customer satisfaction in marketing planning and implementation.
2. Explain the concept of value and the importance of creating value for customers.
3. Illustrate the concept of Lifetime-Customer Value.4. Outline and explain the value-adding chain.5. Explain the concept of bench marking and its application in
producing customer satisfaction and company competitiveness.
6. Explain the important features of customer relationship marketing and how it is applied.
7. Explain the concept of performance gap analysis.8. Outline the steps involved in a marketing effectiveness audit.
6Ensuring Total Customer Satisfaction & Managing Customer Relationships
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Total Customer Satisfaction
• Providing a good or service that fully and without reservation conforms to the customer’s requirements.
6Ensuring Total Customer Satisfaction & Managing Customer Relationships
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Lifetime-Customer Value (LCV)
• The sum of all future-customer revenue streams minus product and servicing costs, acquisition costs, and marketing costs.
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Lifetime-Customer Value Development
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Investment phase
Stranger Prospect CustomerLoyal, lifetimecustomer
Repeat customer
+
_
Recoupcosts
Increasingprofit
Relationship buildingBusiness expansion
Reordering, Loyalty generation
Figure 6.1
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An LCV Approach to Marketing Management
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Figure 6.2
Marketing Management(LCV orientation)
•Acquisition•Retention•Add-on selling
•Products•Pricing•Marketing Communications•Distribution
Customermanagement
Marketing mixmanagement
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Customer-Based Intangible Resources: Development Paths and Company Value
Organizational and Marketing Knowledge
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Figure 6.3
Organizational and Marketing Knowledge
CustomerSatisfaction
Trust
Image
Loyalty
Reputation
Relationship
Marketing Management(LCV orientation)
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Value
• A subjective term that is defined by the customer; part of customer expectations, which are a combination of cost, time, quantity, quality, and human factors.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Market Challenges for Providing Value• Escalating customer expectations
• Competitive forces
• Cost pressures
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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The Value-Adding Chain
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Figure 6.4
CULTURENorms, values, rituals, and relationships
SYSTEMSOperating,Administrative control, and reward
PERFORMANCEEmployee Behaviour
RESULTSQuality, productivity,and service outcomes
VALUECustomer satisfactionand competitive advantage
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Customer’s Views of Value Leaders (1 of 2)
Operational Excellence“They provide a great deal”
– excellent/attractive price– minimum acquisition cost and hassle– lowest overall cost of ownership
“A no-hassles firm”– convenient– consistent quality
Performance Superiority“They’re the most innovative”
“Constantly renewing and creative”
“Always at the leading edge”
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Table 6.1
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Customer’s Views of Value Leaders (2 of 2)
Customer Responsiveness
“Exactly what I need”– customized products
– personalized communication
“They’re very responsive”– handling of exceptions
– inducing/building relationships
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Table 6.1
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Benchmarking
• The comparison of performance with industry best practices.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Requirements for Using Benchmarking as a Tool
1. Know your operation.
2. Know the industry leaders and competitors.
3. Incorporate the best.
4. Develop superiority.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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The Five Stages in the Benchmarking Process
1. Planning
2. Analysis
3. Integration
4. Action
5. Maturity
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Performance Gap
• The difference between the company’s performance and that of the best of the best.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Marketing Audit
• A comprehensive appraisal of the organizations marketing activities. It involves a systematic assessment of marketing plans, objectives, strategies, programs, activities, organizational structure, and personnel.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Customer Relationship Marketing (CRM)
• Identifying and establishing, maintaining and enhancing, and, when necessary, also terminating relationships with customers and other stakeholders, at a profit, so that the objectives of all parties are met, through a mutual exchange and fulfillment of promises.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Customer Satisfaction Management (CSM)
• A program that focuses on identifying key performance areas to meet or exceed the average customer’s expectations.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Database Marketing
• Creation of a marketing plan based on the use of database technology to define the characteristics and needs of customers.
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CRM Software
• Software designed to analyze a customer database and determine customer needs and characteristics.
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Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
Table 6.3 A Relationship View of Marketing
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Mass Customization
• Organizing to make production of products more flexible to meet specifically stated customer requirements.
Ensuring Total Customer Satisfaction & Managing Customer Relationships 6
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Chapterfo
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