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Objectives
Understand how companies deliver customer value and satisfaction.
Identify the factors that make a high performance business.
Objectives
Realize how companies can improve both customer and company profitability.
Understand how companies can deliver total quality.
Slide 2 of 18
Customer Value
Customers seek to maximize value by
estimating which offer (product/firm) delivers the most value (CPV) forming an expectation of value and acting upon it (purchase) evaluating their usage experience against the expectations
Customer Satisfaction
Satisfaction is defined as . . .
a persons feelings of pleasure or disappointment resulting from comparing a products perceived performance (or outcome) in relation to his or her expectations.
Slide 5 of 18
Customer Satisfaction
To maximize satisfaction . . .
Dont exaggerate the product / services capabilities in advertising or other communications
Dissatisfaction
Customer Retention
Reducing customer churn (defection) is highly desirable
Define and measure retention rate Identify causes of attrition Estimate profit lost from customer defection (customer lifetime value) Estimate cost to reduce defection; take appropriate action
2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 12 of 18
Value Equity
Slide 13 of 18
Frequency programs
Club memberships
20 80 30 Rule
20 20% of your customers 80 Generate 80% of your profit 30 Half of your profit is lost
serving the bottom 30% of your customer base
Slide 17 of 18 2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition