2. 18/3/2003 Chapter 5 Building Customer Satisfaction, Value and Retention and Loyalty

3. 18/3/2003 What is a Customer? “The customer is value-maximizer, within the bounds of search costs and limited knowledge, mobility and income.”

4. 18/3/2003 What is needed by the Customer? Value Satisfaction Retention

5. 18/3/2003 Customer Value

6. 18/3/2003 Customer Value Customer Delivered Value = Total Customer Value - Total Customer Cost What is Customer Delivered Value? “ Is the bundle of benefits expected” Customer Cost “ Is the bundle of costs expected”

7. 18/3/2003 Customer Delivered Value Total Customer ValueTotal Customer Cost Product ValueService Value Personnel Value Image ValueMoney CostTime Cost Energy Cost Psychic cost Determinants of Customer Delivered Value

8. 18/3/2003 What are the factors that may hinder or stop the full implementation of the Customer Delivered Value System? The buyer might be under orders to buy at the lowest cost. Concentrating on the short-term benefits and over looking long term costs. The effect of the Relation between the sales persons and the consumer.

9. 18/3/2003 Customer Satisfaction

10. 18/3/2003 What is Satisfaction? It is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. Satisfaction = function (perceived performance /expectations)

11. 18/3/2003 What are the tools for tracking and measuring Customer Satisfaction Complaint and Suggestion system Customer Satisfaction Surveys Ghost Shopping Lost Customers Analysis

12. 18/3/2003 Attracting and Retaining Customers

13. 18/3/2003 Benefits of Highly Satisfied Customer Stays Loyal Longer Buys more Talks favorably about the company Offer products and services ideas to the company Costs less to serve than new customer

14. 18/3/2003 Why retain Customers? Acquiring a new customer costs 5 times retaining an old one. The average company loss about 10% of its customers annually Customer rate increase with time.

15. 18/3/2003 What are the types of marketing? Basic Marketing: selling the product Reactive Marketing: selling the product and encouraging further contact Accountable Marketing: Follow up on Customers satisfaction. Proactive marketing: involving customers in product and company improvements Partnership marketing: encouraging the customer to become a stakeholder in the company

16. 18/3/2003 Tools to improving the marketing impact Adding financial benefits –Adding social benefits –Individualizing and personalizing customer relationship