CREATING CUSTOMER VALUE, SATISFACTION & LOYALTY

Presented by Sony Kusumasondjaja, SE., MCom.

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Introduction
Traditional Organization Chart vs Modern Customer-Oriented Organization Chart Managers at every level must be personally involved in knowing, meeting, and serving customers Todays increasingly informed customers expect companies to do more than satisfy them, and even more than delight them

CUSTOMER PERCEIVED VALUE

CPV is the difference between the prospective customers evaluation of all the benefits and all the costs of an offering and the perceived alternatives

DETERMINANTS OF CUSTOMER-DELIVERED VALUE

CUSTOMERS & CUSTOMER VALUE

Customers tend to be value-maximizers, within the bounds of searching costs, limited knowledge, mobility, and income Customers estimate which offer will deliver the most perceived value and act on it Whether or not the offer lives up to expectation affects customer satisfaction and the probability that he/she will purchase the product again

FACTORS AFFECTING IRRATIONAL CUSTOMER DECISION

The buyer might be under orders to buy at the lowest price The buyer have a long-term relationship with the sellers sales force The buyer choose alternative that provide him/her personal benefit, instead of company benefit

IMPLICATIONS OF CUSTOMER PERCEIVED VALUE

The seller must assess the customer perceived value The seller who is at customer disadvantage has two alternative (to increase customer value OR to decrease customer costs)

LOYALTY

Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite the situational influences and marketing efforts having the potential to cause switching behavior

VALUE PROPOSITION
The whole cluster of benefits the company promises to deliver A statement about the resulting experience customers will gain from the companys market offering and from the relationship with the suppliers The failures in value delivery process are mostly caused by less attention on product performance than on brand image

SATISFACTION
A persons feelings of pleasure or disappointment resulting from comparing a products perceived performance in relation to his/her expectation If the performance matches/exceeds the expectation, customer is satisfied/delighted If the performance falls short of expectation, customer is dissatisfied

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CUSTOMER EXPECTATION
Buyers form their expectations from past buying experience, friends advice, and marketers promises If the marketers raise expectations too high, the buyer is likely to be disappointed If the marketers set the expectations too low, the buyer wont be attracted

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What Satisfied Customers Do?

Stay loyal longer Buy more (as the company introduces new products or upgrade existing products) Talks favorably about the company and the products Pays less attention to competing brands Less sensitive to price Offers ideas to the company Costs less to serve than new customers because transactions are routine
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PRODUCT & SERVICE QUALITY

Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs Conformance vs Performance Quality

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Marketers & Quality Management

Marketers bear the major responsibility for correctly identifying customers needs and requirements Marketers must communicate customers expectations to product designers Marketers must stay in touch with customers after the sale to ensure that they are satisfied and remain satisfied

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CUSTOMER PROFITABILITY
It is not necessarily the companys largest customers who yield the most profit A person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the companys cost stream of attracting, selling, and servicing that customer Solutions to handling unprofitable customers are to raise fees or to reduce costs

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5 Different Levels of Investment in Customer Relationship Building

BASIC MARKETING REACTIVE MARKETING ACCOUNTABLE MARKETING PROACTIVE MARKETING PARTNERSHIP MARKETING

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3 RETENTION BUILDING APPROACHES

FINANCIAL BENEFITS SOCIAL BENEFITS STRUCTURAL TIES

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Problems in Effectively Using CRM

Large investment Difficult in getting everyone in the company to be customer-oriented and to use available information Not all customers want a relationship with the company

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