Kotler Mm13e Media 05

8/10/2019 Kotler Mm13e Media 05

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Creating Customer Value,

Satisfaction,

and Loyalty

Market ing Management, 13thed

5


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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-2

Chapter Questions

What are customer value, satisfaction, andloyalty, and how can companies deliverthem?

What is the lifetime value of customers?

How can companies cultivate strongcustomer relationships?

How can companies both attract and retaincustomers?

What is database marketing?


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Ritz Carlton - Famous for its

Exceptional Service
http://www.ritzcarlton.com/


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Figure 5.1 Organizational Charts


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What is Customer Perceived Value?

Customer perceived valueis thedifference between the prospective

customers evaluation of all the benefits

and all the costs of an offering and theperceived alternatives.


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Figure 5.2 Determinants of

Customer Perceived Value

Image benefit Psychological cost

Personal benefit Energy cost

Services benefit Time cost

Product benefit Monetary cost

Total customer benefit Total customer cost


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Steps in a Customer Value Analysis

Identify major attributes and benefitsthat customers value

Assess the qualitative importance of

different attributes and benefits Assess the companys and competitors

performances on the different customervalues against rated importance

Examine ratings of specific segments

Monitor customer values over time


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What is Loyalty?

Loyaltyis a deeply held commitment tore-buy or re-patronize a preferred

product or service in the future despite

situational influences and marketingefforts having the potential to cause

switching behavior.


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Top Brands in Customer Loyalty

Avis

Google

L.L. Bean

Samsung (mobilephones)

Yahoo!

Canon (officecopiers)

Lands End

Coors

Hyatt

Marriott

Verizon

KeySpan Energy

Miller Genuine Draft

Amazon


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The Value Proposition

The whole cluster of

benefits thecompany promises

to deliver
http://www.volvo.com/


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Raising Customer Expectations
http://ww.jdvhotels.com/


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Measuring Satisfaction

Periodic Surveys

Customer Loss Rate

Mystery Shoppers

Monitor CompetitivePerformance


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J.D. Power Rates

Customer Satisfaction


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What is Quality?

Qualityis the totality of features and

characteristics of a product orservice that bear on its

ability to satisfy

stated or implied needs.


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Maximizing Customer Lifetime Value

Customer

Profitability

CustomerEquity

LifetimeValue


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Figure 5.3 The 15020 Rule


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Figure 5.4 Customer-Product

Profitability Analysis


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Estimating Lifetime Value

Annual customer revenue: $500

Average number of loyal years: 20

Company profit margin: 10 Customer lifetime value: $1000


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What is Customer Relationship

Management?

CRMis the process of carefullymanaging detailed information about

individual customers and all customertouchpoints to maximizecustomer loyalty.


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Framework for CRM

Identify prospects and customers

Differentiate customers by needsand value to company

Interact to improve knowledge

Customize for each customer


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Harrahs

targetshundreds of

segments


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CRM Strategies

Reduce the rate of defection

Increase longevity

Enhance share of wallet

Terminate low-profitcustomers

Focus more effort onhigh-profit customers


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Focuson

CRM
http://www.enterprise.com/


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Customer Retention

Acquisition of customers can cost five timesmore 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 thelife of a retained customer.


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Figure 5.5 The Customer

Development Process

Prospects

Suspects

Disqualified

First-timecustomers

Repeatcustomers Clients Members

PartnersEx-customers


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Creating Customer Evangelists
http://www.creatingcustomerevangelists.com/


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Steps for Creating

Customer Evangelists

Customer plus-delta

Napsterize your knowledge

Build the buzz Create community

Make bite-size chunks

Create a cause


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Database Key Concepts

Customerdatabase

Databasemarketing

Mailing list

Businessdatabase

Data warehouse

Data mining


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Using the Database

To identify prospects

To target offers

To deepen loyalty

To reactivate customers

To avoid mistakes


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Dont Build a Database When

The product is a once-in-a-lifetimepurchase

Customers do not show loyalty

The unit sale is very small

The cost of gathering information is toohigh


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Perils of CRM

Implementing CRM before creating acustomer strategy

Rolling out CRM before changing theorganization to match

Assuming more CRM technology isbetter

Stalking, not wooing, customers


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Marketing Debate

Online vs. Offline Privacy?

Take a position:1. Privacy is a bigger issue in the

online world than in the offline world.

or

2. Consumers receive more benefitthan risk from marketers knowingtheir personal information.


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Copyright 2009 Pearson Education Inc Publishing as Prentice Hall 5-33

Marketing Discussion

Choose a business and show how

you would go about developing aquantitative formulation that capturesthe concept of customer lifetime value.

Kotler Mm13e Media 05

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