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MM-EPYP- Session 1 1
Session 1:
Customer Acquisition,Satisfaction and Retention:Building
Relationship for
Adding Value
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MM-EPYP- Session 1 2
Main Points
Designing a Customer-Driven MarketingStrategy
Preparing a Marketing Plan and
Programme
Building Customer Relationships, and
Capturing Value from Customers
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MM-EPYP- Session 1 3
Designing a Customer-DrivenMarketing Strategy
To design a winning marketing strategy, themarketing manager
must answer two
important questions:1.What customers will we serve
(what is our target market)?and
2.How can we serve these customersbest(what is our value
proposition)?
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MM-EPYP- Session 1 4
Choosing a Value Proposition
It determines how a company willdifferentiate andposition itself
in themarketplace.
A companys value proposition is the setof benefits or values it
promises todeliver to consumers to satisfy their
needs.
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MM-EPYP- Session 1 5
Choosing a Value Proposition-The Citi Card Way
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MM-EPYP- Session 1 6
Preparing a Marketing Plan andProgramme
Marketing MixProduct varietyQualityDesignFeaturesBrand name
PackagingSizesServicesWarrantiesReturns
Product Place
Channels
CoverageAssortments
Locations
InventoryTransport
Promotion
Sales promotionAdvertisingSalesforce
Public
relationsDirect marketing
PriceList
priceDiscountsAllowances
Payment periodCredit terms
TargetMarket
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MM-EPYP- Session 1 7
Building Customer Relationships
Customer relationship management (CRM)is the overall process of
building andmaintaining profitable customer
relationships by delivering superiorcustomer value
andsatisfaction.
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MM-EPYP- Session 1 8
Customer Satisfaction
C.S. depends on the productsperceived performance relative to
abuyers expectations.
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MM-EPYP- Session 1 9
Customer Value or Profit: AMarketers Dilemma!
Customer Value
Profit
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MM-EPYP- Session 1 10
Customer Relationship Levelsand Tools
Basic relationships
Full partnerships
Frequency marketing programmes Club marketing programmes
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MM-EPYP- Session 1 11
The Tools of CRM
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MM-EPYP- Session 1 12
The Changing Nature of CustomerRelationships
Relating with more carefully selectedcustomers
Relating for long term
Relating directly
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MM-EPYP- Session 1 13
Customer Life Expectancy andCustomer Retention
20
15
10
5
0
50% 60% 70% 80% 90% 100%
Customer Retention
Custom
erLi f
e(pur c
haseperio
d)Years
Customer Life (N)
N = 1
1 - CR
Source: Market-BasedManagement, RogerJ. Best (4th Ed) PHI.
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MM-EPYP- Session 1 14
Capturing Value from Customers
Creating customer loyalty and retention Customer lifetime
value
The Golden Rule: Sell good merchandise, treat your customers
like
human beings, and theyll always come back formore.
Building Customer Equity
Customer Equity= The combined discountedcustomer lifetime values
of all the companyscurrent and potential customers
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MM-EPYP- Session 1 15
Capturing Value from Customers cont.d
Building the Right Relationships with the Right
Customers
Butterflies True Friends
Strangers Barnacles
PotentialProfitability
High
Low
Projected Loyalty
Short-termCustomers
Long-termCustomers
Source: The Management of Customer Loyalty, W. Relnartz, and V.
KumarHBR, July, 2003.
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MM-EPYP- Session 1 16
Thank You
