2. Topics Covered Relationship Marketing Retention Strategies
Loyalty programs
Benefits of Relationship Marketing
Targeting profitable customers

3. ‘At Your Service’ Spotlight: Wine for Dudes
Where customer service is King!
Full service website
Quarterly newsletter
social networking
Word of mouth marketing
‘Dudes of Fortune Quiz Challenge’
Personal relationships with customers
Accommodates individual needs
Customized group tours
Encourages repeat customers
Company merchandise as gifts
“Dudes Dollars” trip vouchers
Customer service recovery:
“wine heals all wounds”

4. Relationship marketing
A form of marketing that attracts customers, retains them, and enhances their satisfaction.
Less expensive to attract repeat customers
Dramatic increases in profits
Spend twice as much gross income
Enhancing customer satisfaction includes:
Nurturing individual relationships
Making customers feel unique
Making customers feel singled out for attention
Loyalty programs

5. Customer Relationship Management Model
Figure 7.1 (Source: Based on Winer, 2001)

6. Levels of retention strategies
Figure 7.2 (Source: Adapted from Zeithaml and Bitner, 2000)

7. Industry growth in loyalty programs
Social media
Experiential benefits
Customized reward programs
Matched benefits across brands
Coalition model
Corporate-wide
Across brands
Hybrid approaches
Figure 7.2 (Source: Adapted from Zeithaml and Bitner, 2000)

8. 2008-2010 loyalty program memberships growth in US
Table 7.1 (Source: Based on Hlavinka and Sullivan, 2011)

9. Hospitality and tourism loyalty programs
Frequent flyer rewards
Repeat customers
Highest fare holders
Elite status customers
 Co-branded credit cards
Issuers pay carriers for miles awarded
Significant income source
Hotel loyalty programs:
Complimentary meals, internet access
Included in franchise fees
Joint programs for smaller brands, boutique hotels
Frequent diner programs:
Rewards Cards
Non-financial incentives e.g. ‘Jump the Line’ perk
Hybrid approaches

10. Service loyalty classification scheme
Figure 7.3 (Source: Adapted from Dick and Basu, 1994)

11. Snapshot: Legend Golf & Safari Resort
Getting to the heart of customer relationship management by focusing on customer preferences.
Corporate relationships linked to management strategies
Dedicated guest relations managers and frontline employee feedback
Customer Relationship Management (CRM) strategy
‘Operation Boat Float’ (OBF).
‘Most Valued Client’
Customer feedback
Attention to unique requirements
Rated response

12. Benefits of Relationship Marketing
Customers loyalty incentives:
High perceived value
‘Get’ should exceed ‘Give’
Rewards for loyalty
Company benefits:
Higher profits through retaining customers
More purchases overall
More frequent purchases
Lowers operating costs
No acquisition costs
Increases company referrals

13. Benefits of relationship marketing
Table 7.2

14. Targeting profitable customers
Building and improving upon traditional segmentation
Studying loyalty- versus defection-prone customers
Identify profitability bands
Identify customers most likely to remain loyal
Develop overall strategy around these customers
Target with retention strategies
Other customers too costly to retain
Little potential to become profitable

15. The 80/20 customer pyramid S
Figure 7.4 (Source: Adapted from Zeithhaml and Bitnen, 2000)

16. Managing loyalty and profitability
Figure 7.5 (Source: Adapted from Kumar and Rajan, 2009, p. 5)

17. A taxonomy of casino customer segments
Figure 7.6 (Source: Watson and Kale, 2003)

18. Case Study: Service Excellence at Sheraton Suites
….What people really remember is the guest experience.
Service interaction key to customer loyalty
Carefully selected and trained staff
Brand-specific programs
‘Building World Class Brands’
Staff empowerment
Strong service culture
Awards for service
Relationship marketing
Tailored to each guest
Personable, non-intrusive attention
‘It’s Our Pleasure’ program
Starwood Preferred Guest program
Loyalty reward point system
Social media monitoring