Unit 2: Creating & Building Customer Value, Satisfaction and Loyalty

Dr.C.Senthil Nathan MBA, M.Phil, Ph.
D(Marketing Area)
Faculty
Faculty of Management
SRM UNIVERSITY
MAKE THING HAPPEN
UNIT 2
CREATING & BUILDING CUSTOMER VALUE,
SATISFACTION AND LOYALTY
CUSTOMER PERCEIVED VALUE

CPV IS THE DIFFERENCE BETWEEN THE PROSPECTIVE
CUTOMER EVALUATION OF ALL THE BENEFIT AND THE
COSTS OF AN OFFERING AND THE PERCEIVED ALTERNATIVES
BENEFITS- IMAGE BENEFIT, PERSONAL BENEFIT, SERVICES
BENEFIT, PRODUCT BENEFIT ALL THIS LEADS TO TOTAL
CUSTOMER BENEFIT
COST- PSYCHOLOGICAL COST(for image benefit), ENERGY

COST(personal benefit), TIME COST(services benefit),
MONITORY COST(Product benefit), TOTAL CUSTOMER
COST(total customer benefit)
CUSTOMER PERCEIVED VALUE & CUSTOMER SATISFACTION
CUSTOMER PERCEIVED VALUE ESTIMATION BY

CUSTOMERS AFFECTS CUSTOMER SATISFACTION AND
REPEATED PURCHASE
CUSTOMER VALUE ANALYSIS
IDENTIFY THE MAJOR ATTRIBUTES AND BENEFITS

THAT CUSTOMER VALUE
ASSESS THE QUANTITATIVE IMPORTANCE OF THE
DIFFERENT ATTRIBUTES AND BENEFITS
AE THE COMPANY AND COMPETITOR
PERFORMANCES ON THE DIFFERENT CUSTOMER
VALUE AGAINST THEIR IMPORTANCE
EXAMINE HOW CUSTOMERS IN A SPECIFIC

EGMENT RATE THE COMPANY
PERFORMANCE AGAINST A SPECIFIC MAJOR
COMPETITOR ON AN INDIVIDUAL ATTRIBUTE
OR BENEFIT BASIS
MONITOR CUSTOMER VALUES OVER TIME
USE OF CUSTOMER VALUE ANALYSIS
IT HELPS TO REVEAL THE COMPANY'S STRENGTHS

AND WEAKNESS RELATIVE TO THOSE OF
COMPETITORS.
DELIVERING HIGH CUSTOMER VALUE
CUSTOMER LOYALTY
Oliver defines loyalty as A deeply held
commitment to rebuy or repatronize a
preferred product or service in future despite
situational influences and marketing efforts
having the potential to cause switching
behaviour
GOOGLE, APPLE, COLGATE ETC

VALUE PROPOSITION: CONSIST OF WHOLE CLUSTER
OF BENEFITS THE COMPANY PROMISES TO DELIVER.
IT IS MORE THAN CORE POSITIONING OF THE
OFFERING.
VALUE DELIVERY SYSTEM :INCLUDES ALL THE
EXPERIENCES THE CUSTOMER WILL HAVE ON THE
WAY TO OBTAINING AND USING THE OFFERING. AT
THE HEART OF GOOD VALUE DELIVERY SYSTEM IS SET
OF CORE BUSINESS PROCESS THAT HELP TO DELIVER
DISTINCTIVE CUSTOMER VALUE

DELIVERING HIGH CUSTOMER VALUE IS BY CREATING VALUE
PROPOSITION, VALUE DELIVERY SYSTEM AND LEADS TO
DEVELOPMENT OF CUSTOMER SATISFACTION AND
DEVELOPING BRAND LOYALTY
TOTAL CUSTOMER SATISFACTION
SATISFACTION IS A PERSONS FEELING OF

PLEASURE OR DISAPPOINTMENT THAT RESULT
FROM COMPARING A PRODUCT PERCEIVED
PERFORMANCE TO THEIR EXPECTATIONS.
CUSTOMER SATISFACTION
CUSTOMER DISSATISFACTION
CUSTOMER DELIGHT
CUSTOMER SATISFACTION TO ALL PARTNERS

INCREASING CUSTOMER SATISFACTION BY LOWERING COSTS
OR INCREASING THE SERVICES REDUCE PROFITABILITY . IT
WILL AFFECT OTHER STAKEHOLDERS OF COMPANY
EMPLOYEES, SUPPLIERS, DISTRIBUTERS ETC.
SOLUTION???
SOURCES OF CUSTOMER EXPECTATIONS
PAST BUYING EXPERIENCES, FRIENDS,

MARKETER INFORMATION, COMPETITOR
INFORMATION & PROMISES
MONITORING & MEASURING CUSTOMER SATISFACTION

IMPORTANCE
BENEFITS OF HIGHLY SATISFIED CUSTOMERS
LOYAL FOR LONGER TIME
BUY UP GRADATION AND NEW VARIETIES
WORD OF MOUTH
LESS ATTENTION TO COMPETITOR BRANDS
LESS SENSITIVE TO PRICES, OFFERS

COST LESS THAN ACQUIRING NEW
CUSTOMERS
INFLUENCING CUSTOMER SATISFACTIONINTERNET ROLE
ROLE OF SOCIAL MEDIA

WEBITE ROLE I GETTING FEEDBACK AND
GRIEVANCES
HIGH CUSTOMER SATISFACTION SHOULD BE
MADE KNOWN TO TARGET AUDIENCE
-JD POWER CUTOMER ATIFACTION RATING
MAXIMIZING CUSTOMER LIFETIME VALUE(CLV)
20-80 RULE
20% OF CUSTOMERS GENERATE 80% or MORE OF
COMPANY PROFIT
20% CUTOMER -150%-300% PROFIT
60%-70% CUSTOMERS-BREAK EVEN
10%-20% CUSTOMER- REDUCE PROFIT BY 100%200%
CUSTOMER PROFITABILITY
PROFITABLE CUSTOMERS
CUSTOMERS REVENUE STREAMS THAT EXCEED ACCEPTABLE

AMOUNT OF COMPANY COST STREAMS FOR ATTRACTING
SELLING AND SERVICING THAT CUSTOMERS
REVENUE STREAM- LIFE STREAM OF REVENUE AND COST NOT

ON THE PROFIT FROM PARTICULAR TRANSACTION.
CUSTOMER PROFITABILITY ANALYSIS

CUSTOMER-PRODUCT PROFITABILITY ANALYSIS
CUSTOMER PROFITABILITY ANALYSIS

ACTIVITY BASED COSTING(ABC)
PLATINUM CUSTOMERS-MOST PROFITABLE

GOLD CUSTOMERS- PROFITABLE
IRON CUSTOMERS- LOW PROFITABILITY FOR DESIRED
VOLUME
LEAD CUSTOMERS- UNPROFITABLE CUSTOMERS
ABC-ESTIMATE ALL REVENUE FROM CUSTOMERS LESS
COSTS(making, distributing product, servicing cost,
tele-calls, travelling cost etc)
ESTIMATING CUSTOMER VALUE-DON LEHMAN & SUNIL GUPTA
FORMULA FOR NOT YET ACQUIRED

CUSTOMER-DON LEHMAN & SUNIL GUPTA
CLV FOR AN EXISTING CUSTOMERS
MAXIMIZING CUSTOMER VALUE

CRM- CUSTOMER RELATIONSHIP MANAGEMENT IS
THE PROCESS OF CAREFULLY MANAGING DETAILED
INFORMATION ABOUT INDIVIDUAL CUSTOMERS AND
ALL CUTOMER TOUCH POINT TO MAXIMIZE
CUSTOMER LOYALTY
CUSTOMER TOUCH POINT-IS ANY OCCASION ON
WHICH A CUSTOMER ENCOUNTER BRAND AND
PRODUCT- FROM PERSONAL EXPERIENCE, MASS
COMMUNICATION OR CASUAL OBSERVATION
INCREASING VALUE OF CUSTOMER BASE FOR

ENHANCING CUSTOMER RELATIONSHIP
1. REDUCING RATE OF CUSTOMER DEFECTION
OR CHURN
SELECTING
TRAINING
EMPLOYEES
TO
BE
KNOWLEDGEABLE
AND FRIENDLY INCREASES THE
LIKELIHOOD THAT THE INEVITABLE SHOPPING QUESTIONS
WILL BE ANSWERED SATISFACTORILY
INCREASING VALUE OF CUSTOMER BASE FOR ENHANCING

CUSTOMER RELATIONSHIP
2. INCREASING THE LONGEVITY OF CUSTOMER

RELATIONSHIP
MAKING THE CUSTOMERS INVOLVED WITH
THE COMPANY LEADS TO CUSTOMER STICK
AROUND THE COMPANY
HOW???
GLAXO SMITHLINE INVOLVING CUSTOMERS

FOR LONGIVITY OF CUSTOMER RELATIONSHIP
HORLICKS TWITTER PAGE
https://twitter.com/hashtag/growdailydrinkda
ily
Chocolate Horlicks Pee Ke Batao Toy Store
Run (the "Contest") to be conducted by
GlaxoSmithKline Consumer Healthcare Limited
(the "Company" or "Organizer").

3. ENHANCING GROWTH POTENTIAL OF EACH
CUTOMER THROUGH HARE OF WALLET ,
CROSS SELLING AND UP SELLING
FERRARI CROSS SELLING

https://www.google.co.in/search?q=images+of+
ferrari+accessories&rlz=1C1CHMO_enIN629IN
629&espv=2&biw=1024&bih=653&tbm=isch&
tbo=u&source=univ&sa=X&ved=0ahUKEwiMu
KWo1pDLAhWOCo4KHbdDesQsAQIHQ&dpr=1#imgrc=Wr1kHClKMSUn
zM%3A

5. MAKING LOW-PROFITABLE CUSTOMERS

MORE PROFITABLE OR TERMINATING THEM
6 FOCUSING DISPROPORTIONATE EFFORT ON
HIGH-VALUE CUSTOMERS
-BIRTH DAY GREETINGS, SMALL GIFTS,
INVITATION TO EVENTS
CUSTOMER DEVELOPMENT PROCESS

POTENTIALS, PROSPECTS, FIRST TIME
CUSTOMERS, REPEAT CUSTOMERS,
CLIENTS(VERY SPECIAL & KNOWLEDGEABLE
TREATMENT),MEMBERS, ADVOCATES &
PARTNERS
BUILDING CUSTOMER LOYALTY
INTERACTING WITH CUSTOMERS- RURAL

RELATIONS, SENIOR MANAGERS IN FRONT
LINE DESK
DEVELOPING LOYALTY PROGRAMS- Frequency
programs(FPs), Club Marketing programs(for
who willing to pay a small fee) Apple user
groups, Harley owners groups(H.O.G)
PERSONALIZED MARKETING- Dell computers
Overall recap
CUSTOMER PERCEIVED VALUE

VALUE PROPOSITION
DELIVERING VALUE PROPOSITION
CUSTOMER SATISFACTION
BRAND LOYALTY
CUSTOMER PROFITABILITY ANALYSIS( 2 METHODS)
MAXIMIZING CUSTOMER VALUE
CUSTOMER RELATIONSHIP MANAGEMENT
BUILDING BRAND LOYALTY
Customer mailing list

It is set of name, address and telephone
numbers of customers
CONSUMER DATABASE
Organized collection of comprehensive

information about individual customers or
prospects that is current, accessible and
acceptable for marketing such as lead
qualification, lead generation, sale of product
and maintenance of customer relationship
DATABASE MARKETING
IT IS THE PROCESS OF BUILDING MAINTAINING AND

USING CUSTOMER DATABASES AND OTHER
DATABASES(PRODUCT, SUPPLIER, RESELLER) TO
CONTACT, TRANSACT AND BUILD CUSTOMER
RELATIONSHIP
DATA WAREHOUSE & DATA MINING
DATA WARE HOUSE- AFTER CAPTURING DATA

QUERY, ANALYZE TO DRAW INFERENCES ON
INDIVIDUAL CUSTOMER NEEDS TO RESPONSES
DATA MINING- MARKETING STATISTICAL
TOOLS ARE APPLIED TO EXTRACT USEFUL
INFORMATION ABOUT INDIVIDUALS, TREND,
SEGMENT FROM MASS OF DATA

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Unit 2: Creating & Building Customer Value, Satisfaction and Loyalty

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Dr.C.Senthil Nathan MBA, M.Phil, Ph.

CUSTOMER PERCEIVED VALUE

COST- PSYCHOLOGICAL COST(for image benefit), ENERGY

CUSTOMER PERCEIVED VALUE & CUSTOMER SATISFACTION

CUSTOMER PERCEIVED VALUE ESTIMATION BY

CUSTOMER VALUE ANALYSIS

IDENTIFY THE MAJOR ATTRIBUTES AND BENEFITS

CUSTOMER VALUE ANALYSIS

EXAMINE HOW CUSTOMERS IN A SPECIFIC

USE OF CUSTOMER VALUE ANALYSIS

IT HELPS TO REVEAL THE COMPANY'S STRENGTHS

DELIVERING HIGH CUSTOMER VALUE

DELIVERING HIGH CUSTOMER VALUE

DELIVERING HIGH CUSTOMER VALUE

TOTAL CUSTOMER SATISFACTION

SATISFACTION IS A PERSONS FEELING OF

CUSTOMER SATISFACTION TO ALL PARTNERS

SOURCES OF CUSTOMER EXPECTATIONS

PAST BUYING EXPERIENCES, FRIENDS,

MONITORING & MEASURING CUSTOMER SATISFACTION

BENEFITS OF HIGHLY SATISFIED CUSTOMERS

LOYAL FOR LONGER TIME

BUY UP GRADATION AND NEW VARIETIES

LESS ATTENTION TO COMPETITOR BRANDS

LESS SENSITIVE TO PRICES, OFFERS

INFLUENCING CUSTOMER SATISFACTIONINTERNET ROLE

ROLE OF SOCIAL MEDIA

MAXIMIZING CUSTOMER LIFETIME VALUE(CLV)

CUSTOMERS REVENUE STREAMS THAT EXCEED ACCEPTABLE

REVENUE STREAM- LIFE STREAM OF REVENUE AND COST NOT

CUSTOMER PROFITABILITY ANALYSIS

CUSTOMER PROFITABILITY ANALYSIS

PLATINUM CUSTOMERS-MOST PROFITABLE

ESTIMATING CUSTOMER VALUE-DON LEHMAN & SUNIL GUPTA

FORMULA FOR NOT YET ACQUIRED

MAXIMIZING CUSTOMER VALUE

INCREASING VALUE OF CUSTOMER BASE FOR

INCREASING VALUE OF CUSTOMER BASE FOR ENHANCING

2. INCREASING THE LONGEVITY OF CUSTOMER

GLAXO SMITHLINE INVOLVING CUSTOMERS

INCREASING VALUE OF CUSTOMER BASE FOR

FERRARI CROSS SELLING

INCREASING VALUE OF CUSTOMER BASE FOR

5. MAKING LOW-PROFITABLE CUSTOMERS

CUSTOMER DEVELOPMENT PROCESS

CUSTOMER DEVELOPMENT PROCESS

BUILDING CUSTOMER LOYALTY

INTERACTING WITH CUSTOMERS- RURAL

CUSTOMER PERCEIVED VALUE

Customer mailing list

Organized collection of comprehensive

IT IS THE PROCESS OF BUILDING MAINTAINING AND

DATA WAREHOUSE & DATA MINING

DATA WARE HOUSE- AFTER CAPTURING DATA

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