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5Creating
Customer Value, Satisfaction, and
Loyalty
1
Figure 5.1 Customer-Orientations
What is Customer Perceived Value?
Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
Figure 5.2 Determinants of Customer Perceived Value
Image benefit Psychological cost
Personnel benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefit Total customer cost
Caterpillar Maximizes Customer Value
What is Loyalty?
Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.
Top Brands in Customer Loyalty
Apple iPhone Clairol Samsung Mary Kay Grey Goose Clinique Avis Wal-Mart
Google Amazon Bing J.Crew AT&T Wireless Discover Card Verizon Wireless Cheerios
What is Customer Satisfaction?
Customer Satisfaction is the extent to which product’s perceived performance matches a buyer’s expectation.
Measuring Satisfaction
Periodic surveys Customer loss rate Mystery shoppers Monitor competitive performance
What is Quality?
Quality is the totality of features andcharacteristics of a product or
service that bear on its ability to satisfy
stated or implied needs.
What is Total Quality Management?
TQM is an organization-wide approach to continuously improving the quality of all the organization’s processes, products and services.
What is Customer Lifetime Value?
CLV is the value of entire stream of purchases that the customer would make over a lifetime of patronage.
What is Customer Equity?
Customer Equity is the total combined customer lifetime values of all of the company’s customer.
What is Customer Relationship Management?
CRM is the overall process of building and maintaining profitable customer relationship by delivering superior customer value and satisfaction.
What is Partner Relationship Management?
PRM is working closely with partners in other company departments and outside the company to jointly bring greater value to customer.