4. Starbucks – A unique community experience by providing customers a “3 rd place” between home and work. Service Delivery System Operating Strategy Service Concept Target Market STRATEGIC SERVICE VISION
5. Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Actual Profit to Service Provider Cost to Service Provider Value of results to Customer vs. = Potential profit to Service Provider Service Delivery System Operating Strategy Service Concept Target Market STRATEGIC SERVICE VISION Price and Access Costs to Customer Value of results And Perceived Quality to Customer vs. = Value to Customer Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
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7. Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN Internal Marketing Interactive Marketing External Marketing Company (Management) Customers Employees “ Enabling the promise” “ Delivering the promise” “ Making the promise” Source : Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
10. Perceived Value = Quality Perceived Cost (Perception - Expectation) (Acquisition Cost) + (Perceived Price) Perceived Value =
11. In the 1990’s In the 2000’s Expansion into Retail Locations Individual Storefronts (Quality) (Acq. Cost) + (P. Price) (Same) (Decreased) + (Same) = Increase in Perceived Customer Value
12. Teller ATM Phone/ Computer Movies via mail Movies online Potential Changes in the Value Equation Traditional Rental Stores Traditional Carriers Discount Carriers Quality Acquisition Costs Perceived Price Multiple languages Time Historical Reliability Ease of Use Competitors Availability Convenience Demand for Funds
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15. www.progressive.com and the Customer Respect Group http://www.forbes.com/2008/02/20/service-consumers-retail-biz-cx_tvr_0220service_slide_8.html http://businesstravel.about.com/od/airlineinformation/a/ontime_stats.htm Southwest United On-time arrival 80.5% 71.6% Lost luggage per 1000 (# of passengers) 4.55 (104,758,285) 5.24 (54,114,611)
20. Source: economy of customer loyalty: “The Loyalty effect” Reichheld Source: The Service Profit Chain by Haskett, Sasser & Schlesinger New customer Defection Rate 1. Acquisition cost 2. Base Profit 3. Cost savings 4. Referral 5. Price Premium Time Customer inventory Percent increase in Customer Value Auto service 30% 85% 75% 25% Bank Credit card Credit insurance Profit increase resulting from 5% inreases in customer loyalty
Clear objectives with table of contents on the block + take away Recap on conclusion of each secion Be as structured as possible Know the conclusion where we are going and don t be too opened in the game part Overall learning Bring hand outs
Strategy service business strategy: provide an experience, a way out of the outside, safe
Dynamic view of the value creation
Satisfaction over time can change, require improvement. Satisfaction is dyanmic as is loyalty
- Customers have different behviors hence different segmentation low profitable high profitable long term short term page 93”the mismanagement of customer loyalty Weiner Reinartz