Chapter 2 Connecting with Customers - Coggle Diagram
Chapter 2 Connecting with Customers
Building Customer Value, Satisfaction, and Loyalty
• ... is to build and maintain successful relationships with consumers by offering a product which has benefits that the consumer values
High level of customer satisfaction
• if a product delivers value, the company is likely to have a high level of customer satisfaction. They will tell others about the product and speak highly of it when asked or when reviewing the product online.
• strong customer relationships will lead to high levels of customer retention –customers will not defect to the competitor or stop using the product.
Defined as the
of what they gained vs. what they gave up to purchase a product or use a service
Perceived value is relative and subjective
Developing a value proposition
“The buyer chooses between different offerings on the basis of
which is perceived to deliver the most value
. Value reflects the perceived tangible and intangible benefits and costs to the customer...”
• The difference between the customer’s evaluation of all the benefits and costs of an offering and its alternatives
Total customer benefit vs. total customer cost
total customer benefit
=product benefit+services benefit+personnel benefit+image benefit
total customer cost
=monetary cost+time cost+energy cost+psychological cost
Three Classes of Value: Psychological +Functional+Economic
: product differentiation+product quality+service+packaging+branding+price differentiation+creating customer+relationships+time-based competition
: economies of scale+learning and experience+curve+outsourcing+supplier relationships+place+regulations
Analysing Customer Value
Identify the major attributes and benefits that customers value
Assess the quantitative importance of the different attributes and benefits
Assess the company’s and competitors’ performances on the different customer values against their rated importance
Monitor customer values over time
• The individual's perception
of the performance of the product or service in relation to his or her expectations.
Customer groups based on loyalty
include loyalists, apostles, defectors, terrorists, hostages, and mercenaries
: many companies are systematically measuring how well they treat customers, identifying the factors shaping satisfaction, and changing operations and marketing as a result. Periodic surveys (e.g. NPS, CSAT, CES) // Customer loss/churn rate// Mystery shoppers
The objective of providing value
is to retain highly satisfied customers.
Loyal customers are key
• They buy more products
• They are less price sensitive • Servicing them is cheaper
• They spread positive word of mouth
Cultivating Customer Relationships
Customer relationship management (CRM)
: The process of carefully managing detailed information about individual
customers and all customer “touch points” to maximize loyalty
Customer reviews/ recommendations
:about 25% of customers are dissatisfied with their purchases, yet only about 5%
percent complain// customers whose complaints are satisfactorily resolved tell an average of 5 people, while the average dissatisfied customer complain to 11 people
traditional organization chart
: top management/middle management/frontline people/customers
modern customer-oriented organization chart
: customers/frontline people/middle management/ top management
The Changing Marketing Landscape
The Digital Age: Online, Mobile, and Social Media Marketing
The number of internet users in 2018 is 4.021 billion, up 7 percent from 2017 (Hootsuite, 2018)
The average internet user now spends around 6 hours each day using internet-powered devices and services – that’s roughly one-third of their waking lives (GlobalWebIndex 2018).
Now more than 83,8% of households in Turkey have Internet connection (TUIK, 2018).
29,3% of Internet users have made online purchases in the last 12 months (TUIK, 2018)
In 2017, Turks spent 11 billion USD online for B2C purchases, which is 4,1% of total retail market (TUBİSAD 2018).
As Internet users, we produce content (such as photos, videos and updates) and share with others.
We have personal profiles on social networks and interact with customers and brands online.
Building Customer Relationships: Engaging Customers
Customer-Engagement and Today’s Digital and Social Media
Companies today are using online, mobile, and social media to refine their targeting and to engage customers more deeply and interactively, anytime and anywhere.
The new marketing is customer-engagement marketing:
Customer-Engagement Marketing makes the brand a meaningful part of consumers’ conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community.
Source: Foresight Factory
• Pop Politics – take a stand
• Surveillance society监视社会 – data is currency, make data meaningful
• Expressive consumption – purpose, health, sustainability
• Customer co-creation – invite consumers in
• Generations – changes in demographics and family composition
• Changing face of influence – authenticity is key, flaws are fine
• Culture of immediacy and gratification – be nimble be quick