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Understanding Your Customers
By: Razaki PutehB.Econ(Hons), M.B. A
18hb Julai 2010 10.30 Pg
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Understanding Your Customers
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Understanding Your Customers
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Understanding Your Customers
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Understanding Your Customers
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Understanding Your Customers
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What is Marketing?
Process by which individuals andgroups obtain what they need and
want through creating andexchanging products and value
with others.
Simply put: Marketing is the deliveryof customer satisfaction at a profit.
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Core Marketing Concepts
Needs, wants,and demands
Productsand services
Value,satisfaction,and quality
Exchange,transactions,
and relationships
Markets
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Production Concept
Selling Concept
Market Concept
Societal Marketing Concept
Marketing Management
Philosophies
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Market and Sales Concepts Contrasted
FactoryExisting
Products
Sellingand
Promoting
ProfitsthroughVolume
The Sales Concept
StartingPoint
Focus Means Ends
MarketCustomer
Needs
IntegratedMarketing
Profitsthrough
Satisfaction
The Market Concept114/29/2012
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Key Issues
CUSTOMER VALUE
CUSTOMER SATISFACTIONS
BUILDING RELATIONSHIPS
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Customer Development Process
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CUSTOMER RETENTION
Customer retention is powerful than customersatisfaction.
Research
60% revenue- existing customer
96% customer dont complaint- but share with others.
82-95% customer retain if responded properly.
It costs 5 times to attract a new customer.
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Facts about Customers
The Customer is the business biggest asset
The Customer pays all our salaries wages and bonuses
The customer will go where he/she receives the bestattention
There is no profit, no growth, no jobs without the customer
Life blood of business.
.
J Hence, You must be your customers best choice!164/29/2012
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A typical dissatisfied customer will tell 8-10 people about
their problem.
7 out of 10 complaining customers will do business with
you again if you resolve the complaint in their favor.
If you resolve a complaint on the spot, 95% will do
business again.
J Satisfied customers create profits. Profits, in turn create
organizational success and the ability to pay employees
Facts about Customers
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Starbucks doesnt sell expensive coffee.
Starbucks solves the problem of where to find acomfortable, relaxing, sociable environment,
where you can enjoy 40 minutes of friendly
conversation with friends....priceless!
Customers want Benefits and Solutions
Customer satisfaction is about problem solving
and enabling achievement
What does your product or service really deliver?
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Customer Expectations
PERFORMANCE
Primary operating characteristics
FEATURES
Bells and whistles
RELIABILITY
CONFORMANCE
DURABILITY
Length of practical use
SERVICEABLITY speed, courtesy, and competence
of repair
AESTHATICS How a product looks, feels,
sounds, taste or smell
Probability of survival
Degree to which a products meetstandard
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Japanese Value Delivery Process
1 Zero customers feedback time
2 Zero product improvement
time
3 Zero purchasing time
4 Zero setup time
5 Zero defects204/29/2012
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1. Performance
Fitness for use
Product/ service is ready for use.
Availability
Reliability
Maintainability
2. Features
Secondary character
Extra facilities214/29/2012
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3. Service
Provide the service at right time, even though
the customer dont complaint.
4. Warranty
Represents a promise of a quality product.
Force the org to focus on customer needs.
Forces the org to correct the action system.
It attracts and build the market224/29/2012
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5. Price
Nowadays customer is ready to give high price
towards Quality. Expects to get good product in lower price.
Customers perception of value is continuously
changing. To Succeed the org should identify, verify the
perception of value.
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6. Reputation
Customer wills to buy product from a known
company.
Reputation brings market to the Org.
So org should strive for customer for life.
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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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Added value satisfies customers
Product: Bigger Simpler More compact More reliable More convenient More durable Easier to maintain
Delivery: Quicker More Frequent
Service: Friendlier More imaginative
Literature: More informative Better written More visual
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How Do Consumers Choose Among Products
and Services?
Interfunctional activities involves Improving the Quality ofProducts, Servic es, and Marketing Processes
Products Perceived Performance in Delivering Value Relative to
Buyers Expectations isCustomer Satisfaction
Value Gained From Owning a Product and Costs of
Obtaining the Product is Customer Value
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F t Th t Aff t Th C
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Factors That Affects The Consumer
Decision-Making Process
Cultural Culture and values
Social class
Social Reference group
Opinion leader family
Individual Gender
Age & family
Personality Self concept
Life style
Buy/Dont buy
Consumer
decision making
process
Psychological Perception
Motivation
Beliefs & attitudes
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CUSTOMER
SATISFACTION
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Customer Loyalty VS Satisfaction
Customer
Expectations
Not meeting
expectations
Meeting
expectations
Exceeding
expectation
Customer
Satisfaction
Dissatisfaction
Satisfaction, but
taken for granted
Enthusiasm &
Surprise
Customer
Loyalty
Defection
Variety Seeking
Customer Loyalty
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The Bridge to Our Customers
Customer Delight
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Any or all interactions which the customer has with your
organization while conducting business
It is the ability to provide a service or product in the way
it has been promised
It is also about treating customers with respect,
individuality, and personal attention
Customer Service
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TELEPHONE STANDARDS
Answer phone by third ring
Smile and Greet customer bysaying Askm, Thank you for
calling TTI, This is Inform customer before placingon hold or transferring the call
Your emotions and feelings are
transferred to people callingyou
Return calls same day beforesundown
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Customer Service - GUEST
Greet the customer
Understand customer needs
Explain features & benefits
Suggest additional items
Thank the customers354/29/2012
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The Customer Wants You To
. . . Invite me back.
. . . Listen to me.
. . . Value me.
. . . Greet me.
. . . Help me.
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YOU as a customer
Share an experience of Good
Customer Service
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YOU as a customer
Share an experience of Bad
Customer Service
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9%
9%
13%
69%
Others
ProductDissatisfaction Better Prices
Elsewhere
Poor Service
Why Customers leave?
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Do You Know Why They Leave?
1% die.
3% move away.
5% develop other relationships.
9% leave for competitive reasons.
14% are dissatisfied with
product or service. 68% leave because of rude or
discourteous service.
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Cost of a Negative Experience
Some facts
On average, customers who have had a bad experience will
tell at least 9 other people.
For every customer who complains, there are 26 other
customers who have had similar problems.
96% of the customers who have had a bad experience will
not complain 90% of these customers will not return.
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Good, Bad, & Excellent Service
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Good Customer Service
Good service is when the customer gets
treatment that meets his/her expectations.
CustomerExpectation
What Customerreceives
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Bad Customer Service
Bad Service is when customer gets treatment
which is less than his/her expectations
CustomerExpectation
What Customerreceives
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Excellent Customer Service
When the customer gets a little more than what
he/she expected, Good Service becomes Excellent
Service
CustomerExpectation
What Customerreceives
+
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Wh t liti i t t t
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2. Completeness
is everything customer asked for provided?is a mail order from a catalogue company
complete when delivered?
1. Time and timeliness
how long must a customer wait for service,and is it completed on time?is an overnight package delivered overnight?
What qualities are important to
our customers?
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4. Consistency
is same level of service provided to eachcustomer each time?
is your newspaper delivered on time everymorning?
3. Courtesy
how are customers treated by employees? are catalogue phone operators nice and are
their voices pleasant?
What qualities are important to
our customers?
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What q alities are important to
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6. Accuracy
is service performed right every time? is your bank or credit card statement correct
every month?
5. Accessibility and convenience
how easy is it to obtain service?does service representative answer you callsquickly?
What qualities are important to
our customers?
7. Responsiveness how well does company react to unusual
situations? how well is a telephone operator able to
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Final Perspective
Consumers and producers
perspectives depend on each other
Producers perspective:
Production process and COST
Consumers perspective:
Fitness for use and PRICE
Consumers view must dominate
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Handling difficult customers is
like removing obstacles that
block the customer path to be
a committedlong-term loyal
customer.
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The
Pareto Principal
. also
Known By
Many Other Names
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A GREAT Management Tool
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A GREAT Management Tool ..
With Many Names!
The Pareto Principle
The Law of The Vital Few
and the Trivial Many
The Power Law
Participation Inequality The 80 20 Rule
ABC Analysis Technique
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Alfred PARETO
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Alfred PARETO
In 1879, the famous Italian economist Alfred
Pareto, noticed that 80% of Italys wealth was
controlled by 20% of the population.
This concept is known as Paretos Law or
Paretos Rule or Pareto Principle or Principle
of imbalance or simply The 80/20 Rule.
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Examples of
Pareto Principle / 80 20 Rule
Input Output
Products
EffectCause
Efforts
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20 80 Rule
20% of your customers
Generate 80% of your profit
2080
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Have YOU Become An 80/20 Individual?
An 80/20 Individual is a person who has learnedthat in order to have success, they don't need
to be increasing their effort by 110%. Most
people who do this are simply doing the wrongthings more often.
Instead, an 80/20 individual looks at the 20%that is responsible for 80% of their results and
then they focus on improving this 20%!
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Questions and Comments are Welcome
THANK YOU
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U d t di Y C t
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Understanding Your Customers
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Understanding Your Customers
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Understanding Your Customers
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Service Quality Culture
Where serving customer is primary businessobjective
Where everyone takes personal responsibilityand initiative for providing quality services
Where managers ensure that the staff givescustomers more importance than their bosses
Where staff support each other and depts.collaborate rather than compete.
Where customer complaints are considered asopportunities to improve
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H d t i
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How does a customer perceive
a caring Organization?
Customer-focused Organization
Convenient
Appreciates/
Values
Customers
Responsive
Take
Ownership
Transparent
(fees, rates,
policies)
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Service Quality Dimensions
RELIABILITYAbility to provide
what waspromised,
dependably &accurately
ASSURANCEKnowledge &courtesy of
employees that
conveys trust &confidence
TANGIBLES
Physical facilities& appearance
EMPATHY
Degree of caring &individual attention
provided tocustomers
RESPONSIVENESS
Willingness to helpcustomers & provide
prompt services
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Positioning the Firm
COST SPEED
QUALITY FLEXIBILITY
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Key Dimensions of Service Quality
ability to provide what waspromisedRELIABILITY
knowledge and courtesy ofemployees and ability to conveytrust
ASSURANCE
physical facilities andappearance of personnelTANGIBLES
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Key Dimensions of Service Quality
degree of caring and individualattentionEMPATHY
willingness to helpcustomers and provide
prompt service
RESPONSIVENESS
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Understanding Your Customers
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Understanding Your Customers
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Identify & anticipate needs Customers dont just
buy products/service; they buy good feelings &
solutions
Make customers feel important & appreciated
Avoid rushing or doing too many things at once
Smile
Apologize when something goes wrong
Service a little more than they expect Use positive verbal & body language
Smile
Tips for Good Customer Service
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Key Dimensions of Quality
Performance primary operating characteristics
Featuresbells and whistles
Reliability probability of operating for specific time
and conditions of use Conformance degree to which characteristics match
standards
Durability - amount of use before deterioration or
replacement
Serviceability speed, courtesy, and competence of
repair
Aesthetics look, feel, sound, taste, smell704/29/2012
C S i
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Customer Service
"Customer service is the ability to provide aservice or product in the way that it has been
promised
"Customer service is about treating others as
you would like to be treatedyourself
"Customer service is an organization's ability
to supply their customers' wants andneeds
"Customer Service is a phrase that is used todescribe the process of taking care of our
customers in a positive manner"
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Quality is what customer perceives to be.
Customer needs goes on changes
Quality level needs are to be improved
accordingly.
ASQ survey ranked six customerperceptions value
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Quality and Profitability