Customer Satisfaction mngmnt Content

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Customer Satisfaction mngmntContent

• Customer Satisfaction
• An introduction
• Measurement and evaluation
• Measurement system
• Importance of CS and relationship to loyalty
• Customer Loyalty
• Measures
• Relationship bonds
• Customer Relationship Management
• Marketing objectives and loyalty

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Customer Satisfaction mngmntContent

• Customer Satisfaction
• An introduction
• Measurement and evaluation
• Measurement system
• Importance of CS and relationship to loyalty
• Customer Loyalty
• Measures
• Relationship bonds
• Customer Relationship Management
• Marketing objectives and loyalty

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• Customer perceived value (CPV) is the difference
  between the prospective customers evaluation of
  all the benefits and all the costs of an offering
  and the perceived alternatives.
• Total customer value is the perceived monetary
  value of the bundle of economic, functional, and
  psychological benefits customers expect from a
  given market offering.
• The key to generating high customer loyalty is to
  deliver high customer value.
• The value proposition consists of the whole
  cluster of benefits the company promises to
  deliver, it is more than the core positioning of
  the offering.
• The value-delivery system includes all the
  experiences the customer will have on the way to
  obtaining and using the offering.

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Satisfaction and loyalty

• Satisfaction is a persons feeling of pleasure or
  disappointment resulting from comparing a
  products perceived performance (or outcome) in
  relation to his or her expectations.
• Loyalty is defined as a deeply held commitment
  to rebuy or repatronize a preferred product or
  service in the future despite situational
  influences and marketing efforts having the
  potential to cause switching behavior.

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Antecedents and consequences of CSthe basic
model

• Disconfirmation paradigm
• Expectations
• Perceptions
• Dis/confermation
• Satisfaction/ Dissatisfaction
• Satisfaction ? perceived performance
  expected performance
• Overall satisfaction satisfaction for individual
  attributes
• Satisfaction repeat buying, w-o-m,
  cross-buying

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Measurement of CS -a few basic facts

• Satisfaction is determined by the comparison of
  perceived performance with expectations
• Expectations take very different forms will,
  should, ideal, fair
• There is an area of tollerance around desired
  and adequate expectations
• Overall satisfaction is determined by the pooling
  of satisfaction for each attribute
• Satisfaction effects repeat buying, positive
  w-o-m, cross buying

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Evaluation of CS -a few basic facts

• Measures of satisfaction have to be evaluated in
  relative (and not in absolute) terms
• The gap between perceptions and expectations
  shows a non-linear relation with satisfaction
• Each attribute plays a different role and has a
  different impact on global satisfaction
• At times, asymmetries and interaction come in
  (hygienic/ motivating factors)

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Analysis of CS

• Identify attributes
• Measure overall satisfaction
• For each attribute, measure
• Importance
• Satisfaction
• For each attribute, calculate the impact on
  overall satisfaction
• Measure intention to repeat buying, w-o-m,
  cross-buy
• Calculate the most important attributes

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Standard Quadrant priorities
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Modified Quadrant priorities
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TRM analysis
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The Kano Approach

• For each need, answer the following two
  questions, using the Kano Table
• How would you feel if the need is met?
• How would you feel if the need is NOT met?
• I would like it that way
• It must be that way
• I am neutral
• I can live with it that way
• I dislike it that way

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The Kano Approach Types of Needs

• Must Have No matter how well the product meets
  that need, the customer simply accepts it as
  something that is expected. However, it the need
  is not met, the customer is very dissatisfied.
• E.g., Coverage in big cities for Cell Phones
• Linear Satisfier The better the product is at
  meeting the need, the better the customer likes
  it
• E.g., Clarity of sound
• Delighter the delighter is not expected, so its
  absence does not cause dissatisfaction. If the
  need is met, however, it will increase customer
  satisfaction.
• E.g., Design elements
• Indifferent Quality Element Produces neither
  satisfaction nor dissatisfaction in the customer,
  regardless of whether it is met in the product or
  not
• E.g., Text messaging
• Reverse Quality Element The implies that either
  the questions being asked are not correct, or
  that this trait is undesirable to the customer.

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CS measurement methods

• Survey on CS
• Mystery shopping
• Complaint analysis
• Lost clients analysis

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Customer Satisfaction mngmntContent

• Customer Satisfaction
• An introduction
• Measurement and evaluation
• Measurement system
• Importance of CS and relationship to loyalty
• Customer Loyalty
• Measures
• Relationship bonds
• Customer Relationship Management
• Marketing objectives and loyalty

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Importance of C.S. a few facts

• Satisfaction and business performance
• Satisfaction and profitability
• Satisfaction and purchase
• Costs of acquisition and maintenance
• Positive and negative word-of-mouth
• Effects of dissatisfaction
• Loss of clients
• Duration and value of relations

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Customer Satisfaction and Loyalty
High
Local telecom
Hospital
Aviation
No competition
Loyalty
PC
High competition
Automobile
Low
High
Low
Satisfaction
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Customer Satisfaction mngmntContent

• Customer Satisfaction
• An introduction
• Measurement and evaluation
• Measurement system
• Importance of CS and relationship to loyalty
• Customer Loyalty
• Measures
• Relationship bonds
• Customer Relationship Management
• Marketing objectives and loyalty

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Overall relationship value

• Future revenues (as is) by duration
• Added revenues from
• Upselling (penetration within category)
• Trading up (migration towards richer offers)
• Cross buying
• Added revenues from word-of-mouth
• Other added revenues (reputation, knowledge)

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Measures of loyalty

• Behaviour (transactions)
• repeat buying
• Share of category requirements
• Behaviour (relation)
• Churn rate
• Duration of relation
• CLV
• Attitude
• Intention to rebuy, recommend
• Intention to cross buy

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• Customer Lifetime Value (CLV)
• describes the net present value of the stream of
  future profits expected over the customers
  lifetime purchases.
• Customer Equity
• describes the combined discounted customer
  lifetime values of all the companys current and
  potential customers.

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Customer Relationships

• Loyalty and retention programs build
  relationships and may feature
• Financial Benefits (incentives)
• EX Frequency marketing programs
• Social Benefits (affiliation)
• EX Club marketing programs
• Structural Ties (lock ins)
• Focus is on relating directly to profitable
  customers, for the longterm.

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Customer Relationship Management

• The overall process of building and maintaining
  profitable customer relationships by delivering
  superior customer value and satisfaction.
• Acquiring customers
• Keeping customers
• Growing customers
• Customer relationship management (CRM) is the
  process of managing detailed information about
  individual customers and carefully managing all
  customer touch points to maximize customer
  loyalty.
• Database marketing

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The 80/20 Principle in CRM
Q
1. Where is the boundary in your company? 2.
Where are those 20? Do you have reliable
information about the customers?
3. Who are those 20? Does your company know
them? Who is providing service for them? 4. Can
you provide appropriate Promotion Schemes to
those 20 so as to build deeper relationship with
them? 5. What are the 80 revenue? 6. How can
you maintain the continuous growth of the 80
revenue?
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Process of up-grading

• Suspect
• Prospect
• First time customer
• Repeat customers (core or large, moderate, low or
  samplers)
• Advocates
• Partners

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Customer Satisfaction mngmntContent

• Customer Satisfaction
• An introduction
• Measurement and evaluation
• Measurement system
• Importance of CS and relationship to loyalty
• Customer Loyalty
• Measures
• Relationship bonds
• Customer Relationship Management
• Marketing objectives and loyalty

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Marketing objectives and customer satisfaction

• Sales, MS, profitability, shareholders value,
  market power,
• Market share market penetration or coverage
  (horizontal penetration), repeat buying (vertical
  penetration), usage intensity
• Overall marketing approach
• Offensive marketing
• Defensive marketing
• The phenomenon of double jeopardy

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