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BusinessBusiness--toto--BusinessBusinessMarketingMarketing
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3. Delivering Value3. Delivering Value
The ProcessofThe Processof
Sustaining Customer RelationshipsSustaining Customer Relationships
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Session 13: Sustaining CustomerSession 13: Sustaining CustomerRelationshipsRelationships
OverviewOverview
I. Definingthe ProcessI. Definingthe Process
II. ThinkingStrategically AboutII. ThinkingStrategically About
RelationshipsRelationshipsIII. Delivering RelationshipIII. Delivering Relationship--SpecificSpecificMarketOfferingsMarketOfferings
IV. Pursuing Growthand ContinuityIV. Pursuing Growthand Continuity
V. CompetingThroughBusiness NetworksV. CompetingThroughBusiness NetworksVI. ConclusionsVI. Conclusions
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Sustaining Customer RelationshipsSustaining Customer Relationships
SustainingcustomerrelationshipsSustainingcustomerrelationships isistheprocessof:theprocessof:
fulfillingmutuallyagreeduponfulfillingmutuallyagreeduponcustomerrequirementscustomerrequirements
inasuperiorwayovertimeinasuperiorwayovertime
andand
pursuingatargetedshareofapursuingatargetedshareofa
customers businesscustomers business through buildingmutualselfthrough buildingmutualself--
interest.interest.
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WorkingrelationshipWorkingrelationship referstothereferstothestrengthandextentofeconomic,strengthandextentofeconomic,technical,service,andsocialties betweentechnical,service,andsocialties betweentwoormoretwoormorefirmsfirms..
PersonalrelationshipPersonalrelationship capturesthesocialcapturesthesocial
andeconomicties betweentwoormoreandeconomicties betweentwoormoreindividualsindividuals..
Defining
the
Process
Defining
the
ProcessTypesofRelationshipsTypesofRelationships
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Definingthe ProcessDefiningthe ProcessBe Awareofthe Distinction!Be Awareofthe Distinction!
Relationshipmarketinghastwomeanings:Relationshipmarketinghastwomeanings: TheestablishmentoflongTheestablishmentoflong--term,trusting, winterm,trusting, win--
wintieswithvaluedcustomerfirmsthrough:wintieswithvaluedcustomerfirmsthrough: deliveryofhighqualityproductsdeliveryofhighqualityproducts
outstandingserviceoutstandingservice soundtechnicalsupportsoundtechnicalsupport
andand
atfairpricesatfairprices
Wininganddiningyourfavoritecustomers.Wininganddiningyourfavoritecustomers.
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II. ThinkingStrategicallyII. ThinkingStrategicallyAbout RelationshipsAbout Relationships
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ThinkingStrategically AboutThinkingStrategically AboutRelationshipsRelationships
IndustryBandwidthsIndustryBandwidths
CorrugatedBoxCorrugatedBox
IndustryIndustry
FiberandFiberand
Plastic DrumPlastic DrumIndustryIndustry
ProgrammableProgrammable
ControllerControllerIndustryIndustry
TransactionalTransactional
RelationshipsRelationships
CollaborativeCollaborative
RelationshipsRelationships
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III. DeliveringIII. Delivering
RelationshipRelationship--SpecificSpecificMarketOfferingsMarketOfferings
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Delivering RelationshipDelivering Relationship--SpecificSpecific
MarketOfferingsMarketOfferingsFlaringFlaring--OutStrategiesOutStrategies
CurrentIndustryBandwidthCurrentIndustryBandwidth
a ba b
FlaringFlaring--Out byOut by
UnbundlingUnbundling
c dc d
FlaringFlaring--OutwithOutwith
AugmentationAugmentation
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Unbundlingcandidates:Unbundlingcandidates:deliverydelivery
installationinstallationtrainingtraining
maintenancemaintenance
technicalservicetechnicalservice
Un
bundling
pricing
strategy
Un
bundling
pricing
strategy ---- for
each
for
each
serviceunbundled,thepriceislowered, butitisserviceunbundled,thepriceislowered, butitisloweredlessthanthecostofprovidingtheservice.loweredlessthanthecostofprovidingtheservice.
Delivering RelationshipDelivering Relationship--SpecificSpecificMarket OfferingsMarket Offerings
FlaringFlaring--Out by UnbundlingOut by Unbundling
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Bundlingcandidates:Bundlingcandidates:
coco--designdesign
jointsalescallsandpromotionsjointsalescallsandpromotions
sharedlogisticssystemssharedlogisticssystems
EDISystemsEDISystems
Bundlingpricing
strategyBundling
pricing
strategy ---- a
premium
price
a
premium
price
ischarged;however,thepricepaidislessthantheischarged;however,thepricepaidislessthanthesumofchargesforunbundledservices.sumofchargesforunbundledservices.
Delivering RelationshipDelivering Relationship--SpecificSpecific
Market OfferingsMarket OfferingsFlaringFlaring--Out with AugmentationOut with Augmentation
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IV. Pursuing GrowthandIV. Pursuing GrowthandContinuityContinuity
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Pursuing Growthand ContinuityPursuing Growthand ContinuityExpanding RelationshipExpanding Relationship--SpecificOfferingsSpecificOfferings
othersothers
codesigncodesignBreadthBreadth coordinatedproductioncoordinatedproduction
sharedITandlogisticssharedITandlogistics
jointqualityprogramsjointqualityprograms
coco--marketingmarketing
DepthDepth
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Pursuing Growthand ContinuityPursuing Growthand ContinuityManagingtheBehavioral AspectsManagingtheBehavioral Aspects
PromotehonestandopencommunicationsPromotehonestandopencommunications BuildtrustandcommitmentBuildtrustandcommitment
ImplementcoordinationmechanismsImplementcoordinationmechanisms
AnticipateandresolveconflictsAnticipateandresolveconflicts
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Pursuing Growthand ContinuityPursuing Growthand ContinuityCoordinationMechanismsCoordinationMechanisms
HiHi
RelativeRelative
DependenceDependence
LoLo
LoLo HiHi
Mutual DependenceMutual Dependence
TheTheMarketMarket
PowerPower
CooperationCooperation
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Pursuing Growthand ContinuityPursuing Growthand ContinuityEvaluate RelationshipOutcomesandEvaluate RelationshipOutcomesand
Reassign AccountsReassign Accounts
Motorolas Relationship Criteria:Motorolas Relationship Criteria:
allall programswill
result
in
profits
for
both
programs
will
result
in
profits
for
both
firmsfirms
Motorolasales/profitswill besignificantMotorolasales/profitswill besignificant
Motorolawillmaintainasignificant,ifMotorolawillmaintainasignificant,ifnotexclusive,shareofcustomer businessnotexclusive,shareofcustomer business
thepartnershipwillcontributetothepartnershipwillcontributetoMotorolasMotorolastechnologyroadmapstechnologyroadmaps
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Pursuing Growthand ContinuityPursuing Growthand ContinuityPeriodically Update the Value ProvidedPeriodically Update the Value Provided
Askeachcustomer:Askeachcustomer:
Whathavewenotdonelately?Whathavewenotdonelately?
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Pursuing Growthand ContinuityPursuing Growthand ContinuityP
eriodicallyU
pdate
theV
alueP
rovidedP
eriodicallyU
pdate
theV
alueP
rovided
DevelopaDevelopaCustomer Retention PlanCustomer Retention Plan::
estimateestimatecustomerequitycustomerequity
tracktrackcustomerretentioncustomerretention assesscausesofcustomerdefectionsassesscausesofcustomerdefections
analyzecomplaintandservicedataanalyzecomplaintandservicedata
establishproceduresforrespondingtocustomerestablishproceduresforrespondingtocustomer
defectionsdefections anticipatethereformulationofmarketofferingsanticipatethereformulationofmarketofferings
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V. CompetingThroughV. CompetingThroughBusiness NetworksBusiness Networks
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Competing ThroughCompeting ThroughBusiness NetworksBusiness Networks
Business NetworksBusiness Networks areclustersofareclustersofinterrelatedandcoordinatedinterrelatedandcoordinatedbusinessrelationships.businessrelationships.
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CompetingThroughCompetingThroughBusiness NetworksBusiness Networks
ThreeTypes
of
Business
NetworksThree
Types
of
Business
Networks
Vertical NetworksVertical Networks
Supplierand CustomerSupplierand Customer
Manufacturerand DistributorManufacturerand Distributor
Horizontal NetworksHorizontal Networks
CoopetitionCoopetition
CooperativesCooperatives
Industry AssociationsIndustry Associations
Diagonal NetworksDiagonal Networks
Firmsfrom ComplementaryIndustriesFirmsfrom ComplementaryIndustries
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CompetingThroughCompetingThroughBusiness NetworksBusiness Networks
The Power PC Business NetworkThe Power PC Business NetworkMotorolaMotorola
AppleApple IBMIBM
KaleidaKaleida
TaligentTaligent
SGSSGS--ThomsonThomson BullBull
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CompetingThroughCompetingThroughBusiness NetworksBusiness Networks
TheG
eneralMagic
Business
NetworkThe
General
Magic
Business
Network
AppleApple
Motorola SonyMotorola Sony
GeneralMagicGeneralMagic
PhilipsPhilips MatshushitaMatshushita
AT&TAT&T EOEO
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CompetingThroughCompetingThroughBusiness NetworksBusiness Networks
BuildingBusiness NetworksBuildingBusiness Networks
1. Craftanetworkvision1. Craftanetworkvision
2. Prospectfor,identify,andselect2. Prospectfor,identify,andselectpartnerfirmspartnerfirms
3. Gaincommitmenttonetworkvision3. Gaincommitmenttonetworkvision
4. Developaplanforteamwork4. Developaplanforteamwork
5. Implementandevaluate5. Implementandevaluate
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VI. ConclusionsVI. Conclusions
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ValueManagementValueManagementAsaManagementand ConsultingAsaManagementand ConsultingPracticePractice
ValueManagementValueManagement
Philosophy and ConceptsPhilosophy and Concepts
ValueManagementSystemValueManagementSystem
Processes and ActivitiesProcesses and Activities
ValueManagementMethods&ToolsValueManagementMethods&Tools
Techniques Developed Internally and ExternallyTechniques Developed Internally and Externally