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CREATING CUSTOMER VALUE, CREATING CUSTOMER VALUE, SATISFACTION & LOYALTYSATISFACTION & LOYALTY

Presented bySony Kusumasondjaja, SE., MCom.

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IntroductionIntroduction

Traditional Organization Chart vs Modern Customer-Oriented Organization Chart

Managers at every level must be personally involved in knowing, meeting, and serving customers

Today’s increasingly informed customers expect companies to do more than satisfy them, and even more than delight them

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CUSTOMER PERCEIVED VALUECUSTOMER PERCEIVED VALUE

CPV is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives

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DETERMINANTS OF DETERMINANTS OF CUSTOMER-DELIVERED VALUECUSTOMER-DELIVERED VALUE

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CUSTOMERS & CUSTOMER VALUECUSTOMERS & CUSTOMER VALUE

Customers tend to be value-maximizers, within the bounds of searching costs, limited knowledge, mobility, and income

Customers estimate which offer will deliver the most perceived value and act on it

Whether or not the offer lives up to expectation affects customer satisfaction and the probability that he/she will purchase the product again

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FACTORS AFFECTING IRRATIONAL FACTORS AFFECTING IRRATIONAL CUSTOMER DECISIONCUSTOMER DECISION

The buyer might be under orders to buy at the lowest price

The buyer have a long-term relationship with the seller’s sales force

The buyer choose alternative that provide him/her personal benefit, instead of company benefit

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IMPLICATIONS OF IMPLICATIONS OF CUSTOMER PERCEIVED VALUECUSTOMER PERCEIVED VALUE

The seller must assess the customer perceived value

The seller who is at customer disadvantage has two alternative (to increase customer value OR to decrease customer costs)

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LOYALTYLOYALTY

Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite the situational influences and marketing efforts having the potential to cause switching behavior

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VALUE PROPOSITIONVALUE PROPOSITION

The whole cluster of benefits the company promises to deliver

A statement about the resulting experience customers will gain from the company’s market offering and from the relationship with the suppliers

The failures in value delivery process are mostly caused by less attention on product performance than on brand image

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SATISFACTIONSATISFACTION

A person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to his/her expectation

If the performance matches/exceeds the expectation, customer is satisfied/delighted

If the performance falls short of expectation, customer is dissatisfied

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CUSTOMER EXPECTATIONCUSTOMER EXPECTATION

Buyers form their expectations from past buying experience, friends’ advice, and marketers’ promises

If the marketers raise expectations too high, the buyer is likely to be disappointed

If the marketers set the expectations too low, the buyer won’t be attracted

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What Satisfied Customers Do?What Satisfied Customers Do? Stay loyal longer Buy more (as the company introduces new products or

upgrade existing products) Talks favorably about the company and the products Pays less attention to competing brands Less sensitive to price Offers ideas to the company Costs less to serve than new customers because

transactions are routine

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PRODUCT & SERVICE QUALITYPRODUCT & SERVICE QUALITY

Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs

Conformance vs Performance Quality

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Marketers & Quality ManagementMarketers & Quality Management

Marketers bear the major responsibility for correctly identifying customers’ needs and requirements

Marketers must communicate customers’ expectations to product designers

Marketers must stay in touch with customers after the sale to ensure that they are satisfied and remain satisfied

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CUSTOMER PROFITABILITYCUSTOMER PROFITABILITY

It is not necessarily the company’s largest customers who yield the most profit

A person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling, and servicing that customer

Solutions to handling unprofitable customers are to raise fees or to reduce costs

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5 Different Levels of Investment in 5 Different Levels of Investment in Customer Relationship BuildingCustomer Relationship Building

BASIC MARKETINGREACTIVE MARKETINGACCOUNTABLE MARKETINGPROACTIVE MARKETINGPARTNERSHIP MARKETING

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3 RETENTION BUILDING APPROACHES3 RETENTION BUILDING APPROACHES

FINANCIAL BENEFITSSOCIAL BENEFITSSTRUCTURAL TIES

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Problems in Effectively Using CRMProblems in Effectively Using CRM

Large investment Difficult in getting everyone in the company to

be customer-oriented and to use available information

Not all customers want a relationship with the company