Lecture Marketing management: Chapter 4 – Nguyễn Thị Trang Nhung

Lecture Marketing management - Chapter 4: Creating Long-Term loyalty relationships presentation of content: Steps in a customer value analysis, establishing value, measuring satisfaction, maximizing customer lifetime value, estimating lifetime value,... And other contents.

1 Creating Long-Term Loyalty Relationships Chapter Questions     What are customer value, satisfaction, and loyalty, and how can companies deliver them? What is the lifetime value of customers and how can marketers maximize it? How can companies attract and retain customers and cultivate strong customer relationships? What are the pros and cons of database marketing? Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-2 Builds Relationships Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 1-3 Figure 5.1 Customer-Orientations Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-4 Dell Reestablished Its Commitment to Value Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-5 What is Customer Perceived Value? Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives    Total Customer benefit is the perceived monetary of the bundle of economic, functional, psychological benefit customer expect from a given marketing offering by product, services, personnel and image involve Total Customer cost is the perceived bundle of cost that customers expect to incur in evaluating, obtaining, using and disposing of the given market offering including monetary, time and psychic cost Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-6 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 Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-7 Caterpillar Maximizes Customer Value Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-8 Steps in a Customer Value Analysis      Identify major attributes and benefits that customers value Assess the qualitative 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 Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-9 What is Loyalty? Loyalty is a deeply held commitment to rebuy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-10 Managing Customers Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-14 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 Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-15 Maximizing Customer Lifetime Value Customer Profitability Is a person, household, company that over time yield a revenue stream that exceed by an acceptable a mount the company’s cost stream for attracting, selling and serving that customer Customer Equity Lifetime Value Describe the net present value of the stream of future profit expected over customer life time purchase Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-16 Figure 5.3 Customer-Product Profitability Analysis Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-17 Estimating Lifetime Value     Annual customer revenue: $500 Average number of loyal years: 20 Company profit margin: 10 Customer lifetime value: $1000 Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-18 What is Customer Relationship Management? CRM is the process of carefully managing detailed information about individual customers and all customer touch points to maximize customer loyalty Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-19 Framework for CRM   Identify prospects and customers: Differentiate customers by needs and value to company: estimate customer value and customer time line value   Interact with individual customer to improve your knowledge about individual need and to build stronger relationship Customize product, service and message to each customer Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-20 Amy’s Maximized Word of Mouth Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-21 Attracting and Retaining Customers      Reduce the rate of defection Increase longevity Enhance share of wallet Terminate low-profit customers Focus more effort on high-profit customers Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-22 Figure 5.4 The Marketing Funnel Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-23 Loyalty Programs Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-24 Database Key Concepts    Customer database Database marketing Mailing list    Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall Business database Data warehouse Data mining 5-25 Using the Database      To identify prospects To target offers To deepen loyalty To reactivate customers To avoid mistakes Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-26 Don’t Build a Database When     The product is a once-in-a-lifetime purchase Customers not show loyalty The unit sale is very small The cost of gathering information is too high Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-27 For Review     What are customer value, satisfaction, and loyalty, and how can companies deliver them? What is the lifetime value of customers and how can marketers maximize it? How can companies attract and retain customers and cultivate strong customer relationships? What are the pros and cons of database marketing? Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-28 ... Figure 5 .4 The Marketing Funnel Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-23 Loyalty Programs Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5- 24 Database... retain customers and cultivate strong customer relationships? What are the pros and cons of database marketing? Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5-2 Builds Relationships... 5.1 Customer-Orientations Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 5 -4 Dell Reestablished Its Commitment to Value Copyright © 2011 Pearson Education, Inc Publishing