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Pillar 2 - Coggle Diagram

- - - - commitment level
        
        factors affecting
        
        satisfaction with existing brand
        
        perception of alternative brands
        
        importance of brands to customers
        
        customers' degree of ambivalence
        
        conversion models
        
        committed
        
        entrenched
        
        they are unlikely to switch to any other brands in the near future
        (advocate and loyal customer)
        
        average
        
        they are unlikely to switch to other brands in the short term, but might do so in the medium term (strongly unavailable non-customers)
        
        these customers need to be continuously reassured about the choice that they have made.
        frequent advertising for maintenance of brand is imperative
        
        uncommited
        
        shallow
        
        their commitment level is below average and some may already be actively seeking for alternatives (weakly unavailable non-customers)
        
        convertible
        
        customers who are ready to defect to other brands at any time (available non-customers)
        
        these customers are unlikely to be influenced by any form of advertising.
        they should be given opportunities to lodge complaints and make suggestions
      - Potential Value
        
        companies should aim to retain those customers that have high value.
        strategically significant customers are those customers who create great collective value for the company
        
        Customer Value Categories
        
        High potential value / high actual value
        
        super growth customers
        
        high potential value / low actual value
        
        Most growable customers
        
        low potential value / high actual value
        
        Most valuable customers
        
        low potential value / low actual value
        
        low maintenance customer
        
        strategically significant customers
        
        inspirational customers
        
        customers who bring about improvement for the company. They identify new applications for a product, product improvement, or opportunities for cost reductions
        
        for example, someone complaining that the condensation of the bubble tea cups ruins their drinking experience, and suggesting to implement those cardboard holders to insulate
        
        door opener customers
        
        customers that allow the supplier to gain access to a new market. this may be done for no initial profit, but with a view to proving credentials for further expansions
        
        for example, an old lady buying bubble tea, and telling all her old friends to do the same
        
        benchmark customers
        
        customers that other customers watch and follow, they make it easier for companies to gain new customers
        
        for example, a group of friends buy a new flavour of bubble tea, and everyone in their class buying it too to try it out
        
        high volume customers
        
        does not generate much profit, but absorbs high volume of fixed costs. they bring value through economies of scale
        
        for example, someone who buys a small bubble tea, but everyday, until they die
        
        high lifetime value customers
        
        these customers create the highest value for the company, they contribute significantly to the company profitability in the future
        
        For example, a group of friends that buy bubble tea a lot, and very often
    - - positive strategy
        
        rewards customers for remaining in a relationship
        
        customer loyalty programme
        
        a good customer loyalty programme should benefit both customers and company. it should enhance customers' perceived value of the company and create value for company at the same time
        
        factors affecting
        
        value
        
        rewards must be attractive and worth the amount spent to be eligible for it
        
        convenience
        
        process of claiming the rewards should not be too complicated or time consuming
        
        achievable
        
        qualifying criteria for the rewards scheme have to be reasonable and attainable
      - negative strategy
        
        locks customers by penalising exit
        
        effective in retaining customers in the short term, but customer's loyalty may reduce in the long term
        
        includes exit barriers like high switching cost and penalties for early termination of contract
- - - - customer who generates positive word of mouth
        
        I actively tell people that I am in love with Artfriends and that it's a very good art store
    - - customer who is resistant to switching company
        
        I refuse to buy paints from other stores like Popular
    - - customer who associates the company as a company of choice
        
        I source all of my art supplies from Artfriends
    - - customer who makes additional purchases
        
        I buy more paint brushes, and also some paint tubes
    - - customer who makes the first purchase
        
        I buy the paintbrush from Artfriends for the first time
    - - someone who has shown interest in the product of service
        
        For example, I am looking for a new paintbrush, and I find that Artfriends had really nice brushes
    - - someone who fits the customer profile, but limited information is available
        
        For example, Artfriends, the art store's customer profile would be artists, or aspiring artists, or people who are thinking of starting artsy hobbies
  - - - suspects, prospect, and first time customer
    - - repeat customer, majority customer
    - - loyal customer, advocate
  - - - commitment level
        
        existing customers
        
        non customers
        
        open
        
        available
        
        prefer an alternative to their current ones and are psychologically ready to switch
        
        for example, I am using an Apple IPadPro as my current drawing software, but I am consciously thinking of switching to the Wacom
        
        ambivalent
        
        perceive the alternative and their current brands as equally attractive
        
        for example, I am wearing Nike shoes and think that Adidas is as good as my Nike shoes.
        
        the easiest group to target and acquire
        
        offer worthy incentives, like lower prices or discount vouchers, to entice them to switch
        
        unavailable
        
        weakly unavailable
        
        their first choice lies with their current brands, though not firmly
        
        for example, I often use the Uniball signo pen, and would buy this pen brand again if my current one were to run out of ink. However, if given a valid reason to, I would be ready to switch to a different pen
        
        strongly unavailable
        
        they strongly prefer their current brands and will adhere to that in the short term
        
        for example, I have spotify premium, the student deal, and I will continue to actively use spotify for this, until I no longer qualify as a student. To which I have no definite plan afterwards.
        
        advertising has minimal effort on this segment. The major means of persuading this segment is through free trials
      - customer acquisition cost
        
        customer acquisition cost is the cost of convincing a potential customer to buy a product of service
        
        total marketing and sales cost/total number of customers acquired
    - - advertising
        
        cognitive outcome
        
        deal for companies that aim to raise awareness and generate knowledge of their products/services
        
        affective outcome
        
        ideal for companies that aim to develop a liking for the brand and generate preference
      - sales promotion
        
        a temporary incentive aim at prospects to trigger their buying decision
        
        can be effective in influencing prospects who are at the consideration stage
        
        examples of this are sampling, free trials, discounts, rebates, and free gifts.
      - word of mouth
        
        involves someone whom customers assume to be independent of commercial influence
        
        can be found through customer referrals, social media, feedback and testimonials
      - others
        
        There are other methods, like merchandising, direct marketing, exhibitions, website, or social media marketing
- - - - Unbundle the value proposition and reprice it to the
        customers
        Customers will end up paying for many separate services
        instead of the one complete service provided previously
    - - Encourage customers to purchase comparable higher
        priced products/services than the ones they are considering
        The key to upselling is to help customers visualise the value
        that they will get by choosing the higher priced option
    - - Encourage customers to buy related products and services
        to complement their original purchase
        Cross-selling alerts customers to products and services that
        they may not know are offered by the companies
    - - Method of promoting products and services to new
        customers through positive word of mouth
        Usually happens spontaneously among customers but
        companies can influence this through appropriate strategies
  - - - profitability
        
        Customers purchasing pattern change and no longer
        provide sufficient returns on investment
        Customers who are considered to have high potential value
        are not bringing in as much revenue as expected
      - customers' behavior
        
        Customers who exhibit intolerable behaviour for a prolong
        period of time will affect the productivity of the employees\
        It may not be productive for companies to continue
        allocating resources to manage these customers
      - company's capacity
        
        Companies may lack the necessary expertise, physical or
        financial capacity to continue providing the service
        This could be due to a change in governmental regulations
        or external environment beyond companies’ control
      - business strategy
        
        Companies overall corporate focus or strategy may change, this can happen when companies decide to exit certain market segments
    - - reassess relationship
        
        determine the actual reasons for the customer to be classified as unprofitable
      - educate customers
        
        provide customers with information that they need so that they will not draw on company's valuable resources
      - renegotiate value proposition
        
        to achieve mutual benefits for the company and the customer
        
        implement differential pricing and service strategies
      - migrate customers
        
        when altering the value proposition is not a realistic option
      - terminate relationship
        
        discontinue the relationship with the customer
        
        only if the customer remains unprofitable after all the efforts taken by the company