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ph.linkedin.com/in/marvinpedregosa
CREATING LONG-TERM LOYALTY RELATIONSHIPS
Marvin PedregosaATENEO GRADUATE SCHOOL OF BUSINESS
Connecting with Customers
ph.linkedin.com/in/marvinpedregosa
Outline
STRONG Loyalty Relationships are created through:
1. Maximizing Customer Value
2. Ensuring Customer Delight
3. Solidifying Product Quality
4. Investing in the Right Customers
5. Managing Customer Relationships
6. Being Savvy with Data
WOW
SUCH PRODUC
MUCH QUALITYVERY AMAZE
WOW
WOW
TEACH DOGE PLS
ph.linkedin.com/in/marvinpedregosa
Cust. Perceived Value = Total Benefits – Total Costs
Loyalty Relationship Concept 1 of 6:
SET CUSTOMER VALUE to MAXIMUM
Customer Perceived Value
Product Benefit
Services Benefit
Personnel Benefit
Image Benefit
Total Customer Benefit
Monetary Cost
Time Cost
Energy Cost
Psychological Cost
Total Customer Cost
= -
ph.linkedin.com/in/marvinpedregosa
Undergo CUSTOMER VALUE ANALYSIS
Loyalty Relationship Concept 1 of 6:
SET CUSTOMER VALUE to MAXIMUM
1. Identify benefits, etccustomers value
2. Assign weights
3. Assess company and competitors’ performance
4. Ask customers to rate
5. Monitor
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 1 of 6:
SET CUSTOMER VALUE to MAXIMUMHOW TO MAXIMIZE?
2 Alternatives:
1. Increase Total Customer Benefit
2. Decrease Total Customer Cost
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 2 of 6:
DELIGHT THY CUSTOMERWHAT IS CUSTOMER SATISFACTION?
A person’s feeling of PLEASURE or DISAPPOINTMENTthat result from comparing a product’s perceived performance to expectations.
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 2 of 6:
DELIGHT THY CUSTOMER
Performance < Expectations
DISSATISFIED
Performance = ExpectationsSATISFIED
Performance > ExpectationsDELIGHTED
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 2 of 6:
DELIGHT THY CUSTOMEREVERYONE WANTS HIGHLY SATISFIED CUSTOMERS!
THEY:
1. Stay loyal longer
2. Buys more as the company introduces new & upgraded products
3. Talks favorably to others about the company
4. Pays less attention to competing brands
5. Less sensitive to price
ph.linkedin.com/in/marvinpedregosa
WHY?
Loyalty Relationship Concept 3 of 6:
ENSURE PRODUCT QUALITYHigh Quality
High Customer Satisfaction
High Loyalty
High Prices
Low Costs*
High Profitability
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 3 of 6:
ENSURE PRODUCT QUALITY
HOW? Codify QUALITY as a company priority
Ensure Departmental objectives and targets reflect QUALITY as a priority
Develop action plans to achieve QUALITY targets through daily processes or projects
PERIODICALLY MONITOR
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 4 of 6:
INVEST IN THE RIGHT CUSTOMERS
Marketing is the art of attracting and keeping PROFITABLE CUSTOMERS
Person, household, or company that over time yields
for attracting, selling, & serving that customer.
REVENUE STREAM > COST STREAM
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 4 of 6:
INVEST IN THE RIGHT CUSTOMERSNOT ALL CUSTOMERS ARE “EQUAL”
Customer Profitability Analysis
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 4 of 6:
INVEST IN THE RIGHT CUSTOMERSNOT ALL CUSTOMERS ARE “EQUAL”
The Marketing Funnel
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 5 of 6:
MANAGE YOUR RELATIONSHIPS
CRM
CUSTOMER RELATIONSHIP MANAGEMENT
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 5 of 6:
MANAGE YOUR RELATIONSHIPS
CRM can be practiced through…
1. Personalized Marketing
2. Customer Empowerment
3. Recommendations from consumers
Companies can create stronger bonds with customers by personalizing relationships.
CUSTOMER RELATIONSHIP MANAGEMENT
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 5 of 6:
MANAGE YOUR RELATIONSHIPS
CRM CUSTOMER RELATIONSHIP MANAGEMENT
4-Step Framework for Personalized Marketing
1. Identify Prospects and Customers
2. Differentiate customers in terms of their needs and value
to your company
3. Interact to gain information and build relationships
4. Customize products, services , and messages to each
customer
ph.linkedin.com/in/marvinpedregosa
Loyalty Relationship Concept 6 of 6:
BE DATA SAVVYBUILD A CUSTOMER DATABASE
MINE DATA
ph.linkedin.com/in/marvinpedregosa
Summary
STRONG Loyalty Relationships are created through:
1. Maximizing Customer Value
2. Ensuring Customer Delight
3. Solidifying Product Quality
4. Investing in the Right Customers
5. Managing Customer Relationships
6. Being Savvy with Data
SUCH DELIGHT
LOYAL DOGE
VERY MANAJEDWOW
WOWWOW
ph.linkedin.com/in/marvinpedregosa
Conclusion
LOYAL CUSTOMERS ARE RESULTS OF
1. Good recognition of needs
2. Not settling for anything less than the BEST in Product Quality
3. Well-managed interactions
4. Strategically focused efforts
LOYAL CUSTOMERS ARE PRIORITY!
Repeat Sales, Positive Word-of-Mouth, Neutralized Competition
ph.linkedin.com/in/marvinpedregosa
CREATING LONG-TERM LOYALTY RELATIONSHIPS
Marvin PedregosaATENEO GRADUATE SCHOOL OF BUSINESS
Connecting with Customers
ph.linkedin.com/in/marvinpedregosa
ANALYZING CONSUMER MARKETS
Marvin PedregosaATENEO GRADUATE SCHOOL OF BUSINESS
Connecting with Customers
ph.linkedin.com/in/marvinpedregosa
ph.linkedin.com/in/marvinpedregosa
Outline
HOW DO WE LOOK INTO CONSUMER BEHAVIOR?
1. WHAT Influences Consumer Behavior
2. HOW Do Consumers Think
3. HOW Do Consumers Choose
4. HOW To INFLUENCE Consumers’Behavior
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 1 of 4:
BEHAVIORAL INFLUENCERSWhat is consumer behavior?
It is the study of how consumers select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 1 of 4:
BEHAVIORAL INFLUENCERSFACTORS
3
CULTURAL SOCIAL
PERSONAL
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 1 of 4:
BEHAVIORAL INFLUENCERSFACTORS: CULTURAL
3Culture Sub-Culture Social Class
Family
Key Institutions
Nationality
Religion
Racial Group
Geographic Region
Lower Lowers
Upper Lowers
Working Class
Middle Class
Upper Middles
Lower Uppers
Upper Upper
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 1 of 4:
BEHAVIORAL INFLUENCERSFACTORS: SOCIAL
3
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 1 of 4:
BEHAVIORAL INFLUENCERSFACTORS: PERSONAL
3
AGE ECONOMIC CIRCUMSTANCES
AND OCCUPATION
PERSONALITY AND SELF-CONCEPT
LIFESTYLE AND VALUES
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 2 of 4:
PSYCHOLOGICAL PROCESSES AFFECTING CONSUMERS
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 2 of 4:
PSYCHOLOGICAL PROCESSES AFFECTING CONSUMERSMOTIVATION
Motivation is when a need becomes aroused to a level of intensity that drives us to act.
3 theories of human motivation:
1. Freud 2. Maslow 3. Herzberg
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 2 of 4:
PSYCHOLOGICAL PROCESSES AFFECTING CONSUMERSPERCEPTION
Perception is the process of how we interpret information to create a meaningful picture of the world
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 2 of 4:
PSYCHOLOGICAL PROCESSES AFFECTING CONSUMERSLEARNING
Learning Induces change in our behavior arising from experience
Marketers can thus build product demand by associating it with strong drives, using motivational cues, and providing positive reinforcement
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 2 of 4:
PSYCHOLOGICAL PROCESSES AFFECTING CONSUMERSEMOTIONS
Emotions are involved when consumer response is not all rational but invokes different feelings
• Emotional marketing campaigns help build stronger connections with consumers.
• People can relate more to the brand instead of just associating it as a product.
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 3 of 4:
THE PURCHASE PROCESS
PROBLEM RECOGNITION
PURCHASE DECISION
POSTPURCHASE BEHAVIOR
INFORMATION SEARCH
EVALUATION OF
ALTERNATIVES
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 3 of 4:
THE PURCHASE PROCESS
PROBLEM RECOGNITION
1.
Internal Stimuli
ExternalStimuli
ExternalStimuli
ExternalStimuli
ExternalStimuli
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 3 of 4:
THE PURCHASE PROCESS2.
INFORMATION SEARCH
4 MAJOR INFORMATION SOURCES:
1. Personal
2. Commercial
3. Public
4. Experiential
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 3 of 4:
THE PURCHASE PROCESS3.
EVALUATION OF
ALTERNATIVES
THE EVALUATION PROCESS IS INFLUENCED BY
1. Beliefs
2. Attitudes
3. Expectancy Values (Rationalization)
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 3 of 4:
THE PURCHASE PROCESS4.
NON COMPENSATORY MODELSMakes use of “Mental Shortcuts” or HEURISTICS
1. Conjunctive– Minimum Cut Off per Attribute
2. Lexicographic – Choice among the best of a perceived most important Attribute
3. Elimination-by-Aspects
PURCHASE DECISION
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 3 of 4:
THE PURCHASE PROCESS5.
POSTPURCHASE SATISFACTION
POSTPURCHASE ACTIONS
POSTPURCHASE USE AND DISPOSALS
POSTPURCHASE BEHAVIOR
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 4 of 4:
CONTEXTUAL INFLUENCES &HEURISTICSDECISION HEURISTICS OR RULES OF THUMB
1. Availability – Based on the quickness and ease with which a particular example of an outcome comes to mind e.g. Safety of Malaysia Airline flights
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 4 of 4:
CONTEXTUAL INFLUENCES &HEURISTICSDECISION HEURISTICS OR RULES OF THUMB
2. Representativeness – Based on how representative or similar the outcome is to other examples e.g. Coffee Creamer Packaging
ph.linkedin.com/in/marvinpedregosa
Analyzing Consumer Markets Concept 4 of 4:
CONTEXTUAL INFLUENCES &HEURISTICSDECISION HEURISTICS OR RULES OF THUMB
3. Anchoring or Adjustment – Consumers arrive at an initial judgment and then adjust it based on additional information e.g. Important First Impressions
ph.linkedin.com/in/marvinpedregosa
Summary
HOW DO WE LOOK INTO CONSUMER BEHAVIOR?
1. WHAT Influences Consumer Behavior
2. Psychological Processes AFFECTING Consumers
3. The Purchase Process
4. Contextual Influences and Heuristics
LOL found it
ph.linkedin.com/in/marvinpedregosa
Conclusion
ANALYSIS LEADS TO REWARDS
1. Consumer behavior is affected by a lot of factors
2. Purchase decisions are not purely rational
3. GOOD MARKETING can influence these factors and lead to
meeting company objectives!
ph.linkedin.com/in/marvinpedregosa
ANALYZING CONSUMER MARKETS
Marvin PedregosaATENEO GRADUATE SCHOOL OF BUSINESS
Connecting with Customers
ph.linkedin.com/in/marvinpedregosa