MODULE 2

Customer Relationship: Customer Service

LESSON 1: RELATIONSHIP MARKETING

Relationship Marketing vs. Traditional Marketing

Relationship Marketing includes activities aimed at developing and managing trusting and long-term relationships with
larger customers.

Customer profile, buying patterns, and history of contacts are maintained in a sales database and an account executive
is assigned to one or more major customers to fulfill their needs and maintain the relationship.

Relationship Marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement.

This customer relationship management (CRM) strategy focuses more on long-term customer retention than acquiring
large numbers of new and potentially single-transaction customers.

Traditional Marketing

• Tended to ignore relationships and relationships building.

• Always maneuvering to secure the best terms.

• The company assumed that it would normally keep its current customers, and it spent most of its energy to acquire
new customers.

Main Characteristics of Relationship Marketing:

1. It focuses on the long term rather than the short term.

2. It focuses on partners and customers rather than on the company’s products.

3. It puts more emphasis on customer retention growth than on customer acquisition.

4. It relies on cross-functional teams rather than on departmental-level work.

5. It relies more on listening and learning than on talking.

6. Relationship marketing calls for new practices within the 4Ps:

a. Product- more products are customized to the customer’s preferences and new products are developed and designed
cooperatively with suppliers and distributors.

b. Place - favors more direct marketing to the customer, thus reducing the role of middlemen and favors offering
alternatives to customers to choose the way they want to order, pay for, receive, install, and even repair the product.

c. Price - the company will set a price based on the relationship with the customer and the bundle of features and services
ordered by a customer. In business marketing, there is more negotiating because products are often designed for each
customer.

d. Promotion - favors more individual communication and dialogue with customers, more integrated marketing
communications to deliver the same promise and image to the customers, and sets up extranets with large customers to
facilitate information exchange, joint planning, ordering, and payments.

BENEFITS OF RELATIONSHIP MARKETING

1. Understanding customer characteristics

2. Delivery and meeting expectations

3. Repeat business

4. Prevents negative transition

5. Word-of-mouth marketing

6. Increasing customer base

7. Reduced marketing costs

• Every 5% increase in customer retention can increase a company’s profits from at least 25% up to 125%, while
simultaneously to a reduction of 10% in marketing costs.

• An existing customer will spend 33% more than a new customer.

8. Minimization of customer price sensitivity

9. Identification with the company

• Staying in touch with customers makes them feel like they are important to the company.

10. Product market expansion

• A company that is willing to venture outside its set boundaries, can grow with the support of its customers through
this marketing.

LESSON 2: Customer Value

Customer Value is the relationship between benefits and the costs including money, stress, and time to sacrifice that is
necessary to get those benefits.

Benefits - Cost = Customer Value

Customer Value is not simply about quality and pricing alone. Customer value products and services that are of quality
they expect and that are sold at prices they are able and willing to pay for.

Four Components of Customer Value (SQIP):

1. Service - the intangible value offered to customers

2. Quality - customers’ perception of how well a company’s products and services meet expectations.

3. Image - customers’ perception of the company or business they interact with

4. Price - the price a company can command for its products and services and that its customers are able and willing to
pay.

Consumers want to experience the joy of every hard-earned peso they spent on products or services.

Customer Value encompasses the total experience of the customer regarding the organization, its products and services,
purchase and post-purchase services and consumer support.

Delivering Customer Value

There are three ways a company can establish customer value to its customer base:
1. Provide the consumer with the best cost

2. Provide the consumer with the best product

The luxury vehicle division of Japanese car maker Toyota. Japan's largest-selling maker of premium cars.

3. Provide the consumer with the best service

1. Designing and providing superior customer value are the keys to successful business strategy in the 21st
century.
2. Value reigns supreme today’s marketplace and market-space.
3. Customers will not pay more than a product is worth and will reward excellence.
4. A customer-centric culture provides focus and direction for the organization, ensuring the exceptional value
will be offered to customers.
5. Designing and delivering superior customer value propels organizations to market leadership positions in
today’s highly competitive global markets- absolute advantage.
6. Providing outstanding customer value has become a mandate for management.
7. In choice filled arenas, the balance power has shifted from companies to value-seeking customers.
8. Managing customer value is even more critical to organizations in the new service and information-based
economy.
9. Firms not providing adequate value to customers will struggle or disappear-customer value is a key integrated
in building competitive advantage.
10. Today’s customers are quite smart and sophisticated and are looking for companies that:
a. Create maximum value for them based on their needs and wants, and
b. Demonstrate that they value their business

Creating More Customer Value

1. Understand what drives value for customers

2. Understand value proposition
3. Identify the customers and segments where the company can create more value
4. Create a win-win price
5. Focus investments on the most valuable customer

LESSON 3: Customer Relationship Development Strategies

When it comes in increasing profits, it’s tempting to concentrate on making new sales or pursuing bigger accounts. But
attention to existing customers, no matter how small they are, is essential to keeping any business thriving.

Customer Relationship is a marketing approach that focuses on creating an ongoing and long-term relationship with
customers. It is geared toward building and nurturing strong consumer/customer connections and affiliations, rather than
pushing sales or purchases.

Customers want to know that they are valued and appreciated as an individual.

Benefits of Developing Customer Relationship

1. Consistent customer experience
Organizations that are aligned across all touch points seamlessly share information and work together to ensure
customer’s needs are addressed with minimum effort.
Benefits of Developing Customer Relationship
2. Customer feedback
By paying careful attention to positive and negative trends, organizations can use this feedback to make
appropriate adjustments to products or service offerings, ensuring customer satisfaction.
Benefits of Developing Customer Relationship
3. Customer profitability
When consumers understand the benefits of the offerings, they are typically more compliant and they remain
customers for longer periods of time.
4. Customer advocates
Consumers who are pleased and enjoy a consistent experience increasingly share this information with each other.
5. Innovation
Consumers are allowed to share, vote, and discuss each other’s idea.

Strategies in Developing Customer Relationship

1. Make every customer interaction count

2. Follow-through on commitments and claims about products or services
3. Develop employees
4. Offer benefits and product value that responds to the customers’ desires
5. Treat customers as individuals who are respected and valued
6. Listen to customers
7. Build a strong brand identity
8. Surround customers with valuable information by using emails, website content, social media, and other methods of
outreach but do not be invasive
9. The business must have a website
10. Reward loyal customers
11. Nothing strengthens a bond more than appreciation
12. Create a blog about the business where discussion is more casual and inviting

Lesson 4: Successful Customer Service Strategy in the Philippine Business Enterprise

Customer Service is the act of taking care of the customer’s needs by providing and delivering professional, helpful, high
quality service and assistance before, during, and after the customer’s requirements are met.

Elements of Customer Service

1. A vision for customer service

Service training is the key to a great customer service experience. Employees need to understand their role on
meeting the needs of customers and how their work contributes to the vision.
Elements of Customer Service

2. Assessing customer needs

Successful organizations have learned to find out what the customer wants and to develop products and services
that meet those expectations. Remember that customer wants today could be very different tomorrow.

3. Hiring for service

Hire an employee who is service-oriented. Technical skills can be taught but personality and attitude cannot.

4. Organizational goals for customer value

There should be measurable customer satisfaction goals, and employees should be aware of those goals so they
can help the organization achieve its service objective.

5. Customer service training

This should be practical teaching that demonstrates how the employee is expected to respond in all service
interactions.
6. Employee accountability
It is imperative that all employees understand the part they play and the responsibility they have for helping to
achieve the organization’s overall customer satisfaction goals.

7. Rewarding good service

This ensures that employees receive positive feedback when they exhibit the desired customer service behaviors.

Customer Service Strategy in the Philippines

1. Meet customers where they want to be met.

2. Think mobile, mobile, mobile
3. Focus on personalization

Suki System in the Philippines

Works to create stable relationships between buyers and sellers. A network of an unwritten contracted relationships
between suppliers, sellers and buyers.

If you are a suki, there is an unspoken expectation that you buy the goods or services regularly and occasionally
recommend them to your friends. In return, you get extended credit terms, goods of consistently high quality, and special
treatment when being attended to.