MKTG131 Marketing Management WHY STUDY CUSTOMER SATISFACTION VALUES AND RETENTION To understand how companies deliver customer value and satisfaction To identify the factors that make a high performance business ID: 573983
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Slide1
BUILDING CUSTOMER SATISFACTION VALUES AND RETENTION (TOPIC 2)
MKTG131 – Marketing ManagementSlide2
WHY STUDY CUSTOMER SATISFACTION VALUES AND
RETENTION?
To understand
how companies deliver customer value and satisfaction.
To identify
the factors that make a high performance business.
To understand
how companies attract and retain customers
.
To realize
how companies can improve both customer and company profitability.
To understand
how companies can deliver total quality
.Slide3
WHAT IS CUSTOMER VALUE?
Customers seek to maximize value by
estimating which offer (product/firm) delivers the most value (CPV)
forming an expectation of value and acting upon it (purchase)
evaluating their usage experience against the expectations
Satisfaction results when expectations are equaled or
surpassedSlide4
CUSTOMER PERCEIVED VALUE
Perception of delivered value is a function of:
Total customer costs
Total customer value
Firms at a disadvantage must:
Reduce perceptions of costs or enhance perceptions of valueSlide5
STEPS IN CUSTOMER VALUE ANALYSIS
Identify the major attributes and benefits customer value.
Assess the quantitative importance of the different attributes and benefits.
Assess the company’s and competitors’ performances on the different customer values against their rated importance.
Examine how customers in a specific segment rate the company’s performance against a specific major competitor on an individual attribute or benefit basis.
Monitor customer values over time.Slide6
CUSTOMER SATISFACTION DEFINED
Satisfaction
is defined
as a
person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations
.Slide7
HOW TO MAXIMIZE CUSTOMER SATISFACTION?
Don’t exaggerate the product / service’s capabilities in advertising or other communications
Dissatisfaction will result
FTC may become involved
Don’t set expectations too low
Market size will be limitedSlide8
WHAT IS CUSTOMER RETENTION?
Reducing customer
“churn”
(defection) is highly desirable
Define and measure retention rate
Identify causes of attrition
Estimate profit lost from customer defection (customer lifetime value)
Estimate cost to reduce defection; take appropriate actionSlide9
IMPACT OF QUALITY
Product and service quality, customer satisfaction and company profitability are intimately connected. Higher levels of quality result in higher levels of customer satisfaction, which supports higher prices and often lower costs.Slide10
HOW TO MANAGE YOUR CUSTOMER BASE
Reducing the rate of customer defection
Increasing the longevity of the customer relationship
Enhancing the growth potential of each customer through “share of wallet”, cross-selling and up-selling.
Making low-profit customers more profitable or terminating them.
Focusing disproportionate effort on high-profit customers.Slide11
FORMING STRONG CUSTOMER BONDS
Create superior products, services, and experiences for the target market.
Get customer feedback.
Provide good customer service.
Organize and make accessible a database of information on individual customer needs, preferences, contacts, purchase frequency and satisfaction.
Provide benefits and loyalty programs to purchasing customers.Slide12
END OF PRESENTATION
Reminder:
Group
#2
reporters to present
“Setting the Product and Branding Strategy”
on next meeting.
Homework:
Submit a summary of the
consumer analysis
for the marketing plan assigned to your group
(submission is by group)
.