Module 2 Learning Competencies
The learners…
5. define “relationship marketing”
6. explain the value of customers
7. identify and describe “relationship development
strategies”
8. illustrate successful customer service strategy in
the Philippine business enterprise
Relationship Marketing
• Is a form of marketing developed from direct
response marketing campaigns that emphasizes
customer retention and satisfaction rather than
sales transactions.
• It differentiates from other forms of marketing in
that it recognizes the long-term value of
customers
relationships
and
extends
communication beyond intrusive advertising and
sales promotional messages.
Customer
• Is a person or organization that transacts with a
business person or business organization to buy
goods or services for monetary or other valuable
considerations.
• Acquiring and keeping customers is the end goal
of businesses because customers create
demand.
Managing Customer Service Quality
• Maintaining high levels of customer service
quality may be challenging due to variability of
services.
• In order to ensure the consistency of customer
service quality, organizations conduct rigid
customer service training and assess periodically
how customer service problems, areas of
improvement, and current levels of customer
satisfaction.
Managing Customer Service Differentiation
 How can organizations make their customer
service stand out?
How can they protect their services from being
duplicated by competitors?
 Customer-centered
organizations
can
differentiate their customer service through:
1. The development and training of competent
customer contact personnel and
2. Designing and implementing a superior service
delivery environment and process.
The following are some of the most popular
customer service practices in the Philippines:
Customer Service Practice
Practicing Organization(s)
Free delivery
Most Restaurants and fast food chains
Automated in-home ordering system
Some supermarkets and drug stores
Free gift-wrapping/plastic book jacket
Some department stores and book stores
Merchandise/document pick-up
Selected courier services
Free parking
Some churches and religious organizations
Valet parking
Some hotels and resorts
Reservations, installment plans
Some large department stores, bookstores
Complimentary refreshments, waiting lounge Most car dealership
Help desk, touch phone access, 24-hour
customer hotline
Most utility firms and telecommunication
firms
Free appliance installation
Most appliance stores
Scheduled floral bouquet delivery
Some flower shops
Drive-Through
Most fast food outlets
Free-alterations on garments
Selected apparel retailers
Customer Relationship Management
• At its core, customer relationship management
(CRM) is all of the activities strategies and
technologies that companies use to manage
their interactions with their current and
potential customers.
• A saying frequently heard and said in many
businesses is “customer is the king”.
• CRM help business build a relationship with their
customers that, in turn, creates loyalty and
customer retention.
Effective guidelines in the implementation of
customer relationship management:
1. Adopt the right mind set towards customer service.
2. Purchase or develop CRM software.
3. Quantity customer acquisition and retention costs.
4. Develop and implement a customer service training
program.
5. Empower sales persons to make decisions.
6. Establish communication lines between your customer
and customer contact staff.
7. Shop your competition.
8. Keeping innovating customer service.
9. Promote genuine customer service with passion.
Customer Lifetime Value
 Customer Lifetime Value (CVL) is the forecasted
sales or profits that a company can derive from
entire span of its future relationship with a
particular customer.
Customer Lifetime Value perspective has several
distinct implications:
 It considers a long-term perspective of a company’s
relationship with customers in contrast to a short-term
view of “take the customer’s money and run.”
It calculates and compares costs of acquiring customers
and keeping old ones. This can be used to determine the
revenues that are lost when an existing customer
switches to another product.
It highlights the importance of market segmentation
with the recognition that some customer groups are
profitable than others.
CVL can be measured using the formula:
CVL = (PV)(RP)(RT)
Where:
PV is the average peso value of a sale to a
particular customer
RP is the repeat purchase in a year
RT is the retention time in months or years