Creating Customer Value, Satisfaction,

and LoyaltyBy

Group No 5Abhijeet JyotishiAparajita BhattHimansu BeheraKaranti Kumar

Contents Customer Value Organizational Charts Customer Perceived Value Customer Value Analysis Loyalty Total Customer Satisfaction Customer lifetime value Customer relationship management Customer Retention Loyalty Building Database Management

Difference between what a customer gets from a

product, and what he or she has to give in order

to get it.

“ the only value your company will create is the

value that comes from your customers, the ones

that you have now and ones you will have in the

future. ”

Customer Value

Organizational Charts

Customer perceived value -difference between

Prospective customer’s evaluation of all the benefits

and all Costs of an offering and the perceived

alternatives.

Total Customer Benefit- monetary value of

benefits customer expects from market offering.

Total Customer Cost-cost customer expect to

incur in evaluating, obtaining, using & disposing

market offering.

Determinants of Customer Perceived Value

Image benefitPsychological cost

Personnel benefit Energy cost

Services benefit Time cost

Product benefit Monetary cost

Total customer benefit Total customer cost

Identify major attributes and benefits that customers

value

Assess the quantitative importance of different

attributes and benefits

Assess the company’s and competitor’s

performances on the different customer values

against rated importance

Examine ratings of specific segments

Monitor customer values over time

Steps in a Customer Value Analysis

Loyalty is a deeply held commitment to re-buy

or re-patronize a preferred product or service in

the future despite situational influences and

marketing efforts having the potential to cause

switching behavior.

Value Proposition cluster of benefits company

promises to the customer.

What is Loyalty?

Degree of satisfaction provided by the

goods or services of a firm as measured by

the number of repeat customers.

Dissatisfied

Satisfied

Delight

Total Customer Satisfaction

Measuring Satisfaction

Periodic SurveysPeriodic Surveys

Customer Loss RateCustomer Loss Rate

Mystery ShoppersMystery Shoppers

Monitor Competitive Performance

Monitor Competitive Performance

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 Quality

Performance Quality

What is Quality?

Total profit (or loss) estimated to result from an

ongoing business relationship with a customer over

the life of relationship.

Pareto Law (80:20 Rule)– For most of the events,

roughly 80% affects come from 20% of the causes.

Profitable Customer- a customer who over the

time yields the revenue stream that exceeds by an

acceptable amount the companies cost stream, for

attracting/selling & servicing that customer.

Customer Lifetime Value

Customer-Product Profitability Analysis

CRM is the process of carefully managing

detailed information about individual customers

and all customer touch points to maximize

customer loyalty.

Customer Touch Points- Any association on

which a customer encounters a brand or a

product from actual experience to personal or

mss communication to casual observation.

What is Customer Relationship Management?

Rural touch points

Rural touch points

One to One Marketing

Identify prospects and customers

Differentiate customers by needs and value to company

Interact to improve knowledge

Customize for each customer

Increasing Value of Customer Base

Reduce the rate of defection

Reduce the rate of defection

Increase longevityIncrease longevity

Enhance “share of wallet”Enhance “share of wallet”

Terminate low-profit customers

Terminate low-profit customers

Focus more effort on high-profit customersFocus more effort on high-profit customers

Acquisition of customers can cost five times more

than retaining current customers.

The average customer loses 10% of its customers

each year.

A 5% reduction to the customer defection rate

can increase profits by 25% to 85%.

The customer profit rate increases

over the life of a retained customer.

Customer Retention

The Customer Development Process

Prospects

Suspects

Disqualified

First-timecustomers

Repeatcustomers Clients Members

PartnersEx-customers

Interacting with Customer

Developing Loyalty Programmes

Personalizing Marketing

Creating Institutional Ties

Building Loyaty

Frequency Programme: Frequent Buyers

in substantial amounts.

Club Membership Schemes: Everyone or

limited to an Affinity Group.

Loyalty Programmes

Process of building, maintaining & using Customer Databases and other Data Bases ( product, suppliers, resellers) to contact, transact and build customer relationship.

Database Marketing

Database Key Concepts Customer database Database marketing Mailing list

Business database Data warehouse Data mining

Using the Database

To identify prospectsTo identify prospects

To target offersTo target offers

To deepen loyaltyTo deepen loyalty

To reactivate customersTo reactivate customers

To avoid mistakesTo avoid mistakes

The product is a once-in-a-lifetime purchase

Customers do not show loyalty

The unit sale is very small

The cost of gathering information is too high

Don’t Build a Database When