Customer Value and Customer Relationships

1、Customer Value and Customer RelationshipsCustomer ValueMarketing involves satisfying customers needs and wants; the task of any business is to deliver customer value at a profit.Customer ValueThe Value Creation and Delivery Sequence:the three major stepsChoose the ValueProvide the ValueCommunicate t

2、he ValueCustomer ValueChoose the Value: ActivitiesCustomer segmentationMarket selection/focusValue positioningOften referred to as Strategic Marketing.Customer ValueProvide the Value: ActivitiesProduct developmentService developmentPricing Sourcing and MakingDistributing and ServicingOften referred

3、to as a part of Tactical Marketing.Customer ValueCommunicate the Value: ActivitiesSales forceSales promotionAdvertisingOften referred to as a part of Tactical Marketing.Customer ValueChoose the Value: Helpful ConceptsSTP: Segmentation, Targeting, Positioning(factors to consider before the product ex

4、ists, some call it the essence of strategic marketing)3Vs: Value Segment, Value Proposition, Value Network (Kumar of LSB)Customer ValueDefining Value and Satisfaction:Customers always seek to gain the greatest benefit at the least cost.Customer ValueDefining Value and Satisfaction: Key ConceptsCusto

5、mer Perceived Value (CPV): customers evaluation of all of the benefits and costs of an offering.Total Customer Benefit: perceived monetary value of all of the benefits a customer expects from an offering.Total Customer Cost: perceived bundle of costs a customer expects to incur from an offering.Cust

6、omer ValueTotal Customer Cost:Monetary costTime costEnergy costPsychic costTotal Customer Benefit:Product valueServices valuePersonal valueImage valueCustomer ValueSteps in Customer Value Analysis:Identify the major attributes and benefits that customers value.Assess the quantitative importance of t

7、he different attributes and benefits.Assess the companys and competitors performances on the different customer values against their rated importance.Examine how customers in a specific segment rate the companys performance against a specific major competitor on an individual attribute or benefit ba

8、sis.Monitor customer values over time.Customer ValueAnother important activity is cultivating customer loyalty.Loyalty: deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and/or competitors marketing efforts to entice switchin

9、g.The key to cultivating loyalty is “delivering high customer value”.Customer ValueConcepts to remember:Value proposition: the whole cluster benefits the company promises to deliver.Value deliver system: all of the experiences the customer will have on the way to obtaining and using the product or s

10、ervice.Customer ValueCustomer satisfaction is important too!Satisfaction is determined by whether the product/services performance meets or surpasses expectations.Customer ValueFactors that shape customer expectations:Past buying experiencesFriends and associates adviceMarketers and competitors info

11、rmation and promisesIf you raise expectations too high, the customer is likely to be disappointed.If you set expectations too low, customers may ignore your product/service.Customer ValueSatisfaction also depends on quality.Quality: the totality of features and characteristics of a product/service.C

12、ustomer ValueMarketers six roles in helping define and deliver high quality to customers:Bear the major responsibility for correctly identifying the customers needs and requirements.Communicate customer expectations properly to product/service designers.Make sure that customers orders are filled cor

13、rectly and on time.Ensure that customers receive the proper instructions, training, technical assistance in the use of the product/service.Stay in touch with customers after the sale to ensure their satisfaction.Gather customer ideas for product/service improvements and deliver them to the proper de

14、partments.Customer ValueYou should measure customer satisfaction regularly.Satisfaction and loyalty tend to be linked.High satisfaction often creates an emotional bond with the product/service.Customer RelationshipsMaximizing value of your customers means creating and cultivating long term customer

15、relationships.Instilling loyalty in your customers is the key.Customer RelationshipsThe Five Levels of Relationship Marketing:Basic marketing: selling the product/service (most common).Reactive marketing: selling the product/service and encouraging customers to offer questions, comments, or complain

16、ts.Accountable marketing: following up after the sale to see whether the product/service meets expectations and ask for improvement suggestions and specific disappointments.Proactive marketing: contracting customers periodically with suggestions about new product/service uses or new products/service

17、s.Partnership marketing: working continuously with customers to find ways to perform better.Customer RelationshipsCustomer/distributor numbers, margin, and marketing relationship: usual relationshipCustomer RelationshipsCustomer Relationship Management (CRM):The process of managing detailed informat

18、ion about individual customers and carefully managing all customer “touch points” to maximize customer loyalty.Customer Touch Point: any occasion when the customer encounters the brand and product/service.Customer RelationshipsCRM marketing can employ many techniques and methods.Example: One-to-one

19、marketingFour step one-to-one marketing plan (Peppers and Rodgers)Identify your prospects and customers.Differentiate customers in terms of 1) their needs and 2) their value to your company.Interact with individual customers to improve your knowledge about their individual needs and to build stronge

20、r relationships.Customize products, services, and messages to each customer.Customer RelationshipsIncrease the Value of your Customer Base (or how to get more and continuous money from them)Strategy suggestions:Reduce the customer defection rate through personalizing services.Increase customer relat

21、ionship longevity by getting more involved with your customers.Enhance the growth potential of each customer through cross-selling, up-selling, and share-of-wallet.Make low profit customers more profitable (or terminate them) by encouraging them to buy more, pay more, or forgo certain features or se

22、rvices. Customer RelationshipsThe truth about customers today:SmarterMore price consciousMore demandingLess forgivingApproached by many more competitors with equal or better offersCustomer RelationshipsTherefore, retaining your customers is very important.Retention Suggestions:Adding financial benef

23、its (i.e. frequent use programs)Adding Social benefits (i.e. individual service)Adding structural/institutional ties (i.e. special websites and computer linkages)Customer RelationshipsKey Concepts:Customer Equity: the total of the discounted lifetime value of all of the companys customers.Value Equi

24、ty: the customers objective assessment of the utility of a product/service based on perceptions of its benefits relative to its costs.Brand Equity: the customers subjective and intangible assessment of the brand, above and beyond its objectively perceived value.Relationship Equity: the customers ten

25、dency to stick with a brand, above and beyond objective and subjective assessments of its worth.Customer RelationshipsCustomer profitability: What makes a customer profitable to a company?When a customer spends more on a product/service that exceeds (by an acceptable amount) the companys cost of att

26、racting, selling, and servicing that customer.The focus on customer profitability has lead to classification (or the grouping) of customers by levels of desirability on the part of the company.Customer RelationshipsCustomer Lifetime Value, key conceptThe net present value of future profits from a cu

27、stomer over their lifetime of purchases.Expressed in a formula:= (expected customer revenues expected customer marketing/sales costs)/appropriate discount rateCustomer RelationshipsMajor tool for improving marketing efforts:Company data bases and data miningCompanies now are creating huge databases that include information of their customers and their preferences.Customer RelationshipsHow companies now u