Top 10 concepts

1. Top 10 Concepts
Ch 5 and Creating Customer Value,
Satisfaction & Loyalty
Joan Soliven
April 8, 2011
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2. Outline
1. Customer Perceived Value
2. Customer Satisfaction
3. Quality
4. Maximize Customer Lifetime Value
5. Customer Relationship Management
6. Increase Value of Customer
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3. Outline
7. Customer Development Process
8. Customer Retention
9. Customer Loyalty
10. Database
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4. Customer Perceived Value
Difference between what the customer
gets and what he or she gives for
different possible choices.
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5. Consumers are more educated and
informed, they seek out superior
alternatives
Dell offering better service than HP, they
beginning to outpace Dell in terms of
customer perceived value

6. Successful Companies follow the
Modern Customer-oriented Org. Chart
Customers
Front-line people
Middle
Management
Top
Management
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7. Everyone in the company has their own
role that aims to satisfy the customer
meet serve and satisfy
customers
support the frontline
people
Hire and support good middle
Managers
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8. What do customer perceived
as valuable?
Image Psychological
Personnel Energy
Services Time
Products Monetary
Total Customer Benefit Total Customer Cost
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9. 5 steps to determine
Customer Value
Identify major attributes and benefits that customer
value
Assess the importance of different attributes and
benefits
Assess the company’s and competitor’s performance
Examine ratings of specific segments
Monitor customer values over time
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10. Companies that are Good in
Delivering Customer Value
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11. 2. Customer Satisfaction
The feeling of satisfaction or dissatisfaction of
the customer from a product’s outcome versus
customer’s expectation.
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12. Measurement for
Customer Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive Performance
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13. Measurement for
Customer Satisfaction
Periodic Surveys Customer Loss Mystery Monitor
Rate Shopper Competitive
-Track customer
satisfaction - experience
Performance
-To find out why
they stop buying company’s - find out the customer
& competitor’s Satisfaction rate of
Products & service Competitors.
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14. 3. Customer Satisfaction
depends on Quality
Quality is the totality of features and
characteristics of a product or service
that bear of its ability to satisfy needs.
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15. Impact of Quality
These 3 are interrelated with each other
Product and
Service
Quality
Company Customer
Profitability Satisfaction
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16. 4. Maximize Customer
Lifetime Value
Customer
Profitability
Customer Lifetime
Equity Value
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17. Customer Profitability in relation
to 80-20 or 150-20 Rule
20% of the customer often generates 80% or
more of the company’s profits.
20% most profitable customers generate as
much as 150% of the profits of a company;
the 20% least profitable lose 100% of the
profits.
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18. 5. Customer Relationship Management
The process of carefully managing detailed
information about individual customers and all
customer ”touch points” to maximize customer
loyalty.
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19. Excellent Real-time Customer Service
through the effective use of information
Market offerings
Services
Programs
Messages
Media

20. Maximize Costumer Loyalty through
Customer Relationship Mgmt by:
 Identifying your prospects and customers
 Differentiating customers by their needs and their
value to company
 Interacting with customers
 Customizing for each customer.
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21. 6. Increasing Value of
Customer Base by:
 Reduce the rate of  Terminate low-profit
defection customers
 Increase longevity of
relationship  Focus more effort on high
profit customers
 Enhance ”share of wallet”
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22. How does Customer Value Works?
 Reduce the rate of defection = Knowledgeable employees
to answer customer
satisfactorily
 Increase longevity of relationship = Treat customers
as partners
 Enhance ”share of wallet” = Increase sales by
providing new offerings
An opportunities.
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23. 7.Customer Development Process
Inactive or
Ex-customers
First-time
Potentials customers Clients Advocates
Prospects Repeat Members Partners
Customers
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24. Behavior of Customer in the
Customer-Development Process
 Potentials – interested
 Prospects – motivated
 First-time & repeat customers – needs to be
encourage through marketing efforts
First-time
Potentials customers Clients Advocates
Prospects Repeat Members Partners
Customers
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25. Behavior of Customer in the
Customer-Development Process
 Clients - needs to be treated special
 Members – enjoying the benefits
 Advocates – recommending the product
 Partners
First-time
Potentials customers Clients Advocates
Prospects Repeat Members Partners
Customers
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26. 8. Maintaining Customer is better
than Acquiring Customer
 Acquiring customers can cost 5X more than
retaining them.
 The average customer loses 10% of its
customer each year.
 A 5% reduction to the customer defection
rate can increase profits by 25% to 75%.
 The customer profit rate increases over the
life of a retained customer.
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27. 10. Five Ways in Using Database
To identify prospects
To target offers
To deepen loyalty
To reactive customers
To avoid mistakes
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28. Summary
 The company should meet the customer
perceived value in order to satisfy the total
customer benefits and total customer cost.
 The company should constantly evaluate if
the costumer needs & wants are met
 High satisfaction leads to high customer
loyalty.
 Maintaining customer is easier than acquiring
new costumer.
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29. Conclusion
The heart of satisfying and maintaining
customer is to meet their expectations on the
product/services and create good relationship
thus creates customer loyalty.
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30. Thank you!
Ch 5 and Creating Customer Value,
Satisfaction & Loyalty
Joan Soliven
April 8, 2011
http://joansoliven.blogspot.com/