Uploaded by عنبر رضا


Figure 5.1 Organizational Charts
What is Customer Perceived Value?
•Consumers are better educated and informed than ever
•Customer perceived value is the difference between
the prospective / future customer’s evaluation of all the
benefits and all the costs of an offering and the perceived
Determinants of Customer Perceived Value
Total customer benefit
Total customer cost
Product benefit
Monetary cost
Services benefit
Time cost
Personnel benefit
Energy cost
Image benefit
Psychological cost
•TCB is perceived value of economic, functional and psychological benefits customer
expect from market offering.
•TCC is perceived bundle of costs customers expect to incur in evaluating , obtaining,
using given market offering , energy and psychological costs.
The Marketing Funnel
Steps in a Customer Value Analysis
1. Identify major attributes and benefits that customers
2. Assess the qualitative importance of different attributes
and benefits
3. Assess the company’s and competitor’s performances
on the different customer values against rated
4. Examine ratings of specific segments
5. Monitor customer values over time
What is Loyalty?
Loyalty is a deeply held commitment to re-buy
a preferred product or service in the future
despite situational influences and marketing
efforts having the potential to cause switching
The Value Proposition
The whole cluster of
benefits the
company promises
to deliver
Total Customer Satisfaction
• Satisfaction
disappointment that result from comparing product’s
perceived performance to expectation.
• Performance falls short of expectation customer is dissatisfied.
• If it matches expectation customer is satisfied.
Measuring Satisfaction
Periodic Surveys
Customer Loss Rate
Monitor Competitive
Single Key Question of Net Promoter
“How likely is it that you would recommend
this product or service to a friend or
Use 0-10-point scale
0-6 are Marketers than subtract Detractors
7-8 are deemed Passively satisfied
9-10 are Promoter (Net Promoter ScoreNPS)
World class companies used NPS
Customer Satisfaction
Customer Loyalty
Company’s Profit
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.
Maximizing Customer Lifetime Value
Customer-Product Profitability Analysis
What can company do for customer 2 & 3 ?
•It can raise the price of less profitable product or eliminate them
•It can try to sell customer 2 & 3 its profit making products.
Customer Lifetime Value
(Formula Page No: 116)
• CLV described net present value of stream of
future profits expected over customer’s lifetime
What is Customer Relationship Management?
• CRM is the process of carefully managing detailed
customer touchpoints to maximize customer loyalty.
• CRM enables companies to provide excellent real time
customer service through effective use of individual
account information.
Personalizing Marketing
• It is about making sure the brand and its marketing are
relevant as possible to as many customer as possible – a
challenge , given that no two customers are identical.
• E commerce companies looking to attract and retain
customers are discovering that personalization goes beyong
creating customized information.
Framework for CRM
Identify prospects and customers
(maintain your customer database)
Differentiate customers by needs &
value to company
Interact to improve knowledge
Customize for each customer
Reducing Defection
• It is not enough to attract new customer; company must also
keep them and increase business.
• Too many companies suffer from high customer churn or
• Ex. Telecom MNP introduce in India
• To Reduce defection rate companies must
• Define and measure defection rate
• Differentiate causes of customer attrition and identify those that can be
managed better
• Compare lost customer’s lifetime value to cost of reducing defection rate
Retention Dynamics
• Main steps in attracting and retaining customers in terms of
funnel and some questions to measure progress through the
• The marketing funnel identifies the % of potential target market
at each stage in decision process, from merely aware to high
• Customer must move through each stage to become loyal.
Building Loyalty
• Creating a strong , tight connection to customer is dream of
any marketer and often the key to long term marketing
• Following sections explain 3 types of marketing activities
companies are using to improve loyalty and retention.
1. Interacting with customers
2. Developing Loyalty Programs
3. Creating institutional Ties
Customer Retention
• Acquisition of customers can cost five times more than
retaining current customers.
• The average customer loses 10% of its customers each
• 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.