Transcript Kotler Keller 05

5
Creating Customer Value,
Satisfaction,
and Loyalty
Marketing Management, 13th ed
Figure 5.1 Organizational Charts
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Figure 5.2 Determinants of
Customer Perceived Value
Total customer benefit
Total customer cost
Product benefit
Monetary cost
Services benefit
Time cost
Personal benefit
Energy cost
Image benefit
Psychological cost
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What is Loyalty?
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.
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The Value Proposition
The whole cluster of
benefits the
company promises
to deliver
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Measuring Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive
Performance
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J.D. Power Rates
Customer Satisfaction
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What is Quality?
Quality is the totality of features and
characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.
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Maximizing Customer Lifetime Value
Customer
Profitability
Customer
Equity
Lifetime
Value
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Estimating Lifetime Value
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•
•
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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?
CRM is the process of carefully
managing detailed information about
individual customers and all customer
touchpoints to maximize
customer loyalty.
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Framework for CRM
Identify prospects and customers
Differentiate customers by needs
and value to company
Interact to improve knowledge
Customize for each customer
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CRM Strategies
Reduce the rate of defection
Increase longevity
Enhance “share of wallet”
Terminate low-profit
customers
Focus more effort on
high-profit customers
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Customer Retention
• 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.
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Figure 5.5 The Customer
Development Process
Suspects
Prospects
First-time
customers
Disqualified
Repeat
customers
Clients
Members
Partners
Ex-customers
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Creating Customer Evangelists
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Database Key Concepts
• Customer
database
• Database
marketing
• Mailing list
• Business
database
• 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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