2. Partnering to build customer engagement, value and relationships Flashcards
What is the definition of relationship marketing?
A marketing strategy that is focused on creating, maintaining and strengthening customer relationships with the company
How do you recognise a market failure?
- Customer switching costs are low hence they go to competitors
- Market isn’t well-informed of the product
What is the logic behind relationship marketing?
- Deliver value
- Monitor satisfaction
- Cultivate relationships
- Build loyalty
- Maximise profits of customer retention
What are the 7 P’s of marketing and value?
- Creating value (product)
- Communicating value: IMC (promotion)
- Offering and capturing value (Price)
- Distributing value (Place)
- Serving value (People)
- Emplacing value: Presence (physical evidence)
- Experiencing value (Process)
What is the definition of loyalty?
The customer’s commitment to continue purchasing products from the company despite there being other options
Why do customers leave?
- Terrible customer service
- Long, tedious, complain and response times
- Not ethical with their business
- Competitors have cheaper products and have better incentives
Why are customers loyal?
- Emotional connection with the company
- They like the ethics of the company
- Their values align with the company
Example brands: Nike, Apple
What are drivers for customer loyalty?
- Liking the brand (86%)
- Company delivers on its promise (83%)
- Product has the best quality (83%)
- Easy to use (82%)
- Customer had a good sales experience (68%)
- Products are value for their money
What is are the 4 levels of loyalty?
Loyals, latent-loyals, occasional loyals, no loyalty
Describe features of these levels of loyalty?
- Loyals = true loyalty
- High levels of both attitudinal and behavioural loyalty
- Positive feelings and actions
- Latent Loyalty
- Positive attitudes but does not buy the firm’s products
- Often due to lack of local purchase access or prices beyond their means
- Occasional/spurious loyalty
- Buys products but has ambivalent or negative feelings
- At the first convenient opportunity they will switch
- No loyalty
- No positive feelings and no purchase
Describe the 6 types of customers
- Partner
- someone who has the relationship of a partner with you
- Advocate
- someone who vouches for the brand and recommends it to others
- Supporter
- A passive support of the company
- Client
- Someone who has done business with the company and is neutral
- Customer
- Someone who has done bussiness once with the company
- Prospect
- Someone who could be a potential customers
What is the goal of the customer loyalty ladder?
It is a framework that categorises the company’s customer loyalty and aims to move consumers up the ladder to reap the most benefits
Describe the 7 types of loyalty?
- Incentivised
- Won through discounts and promotion (Big W over bookstores)
- Inherited
- Built through association of other brands (Typo and Cotton On)
- Silent
- Built through a guilty pleasure (cigarettes)
- Ethical
- Customer values align with the company (ZeroCo)
- True
- Built through loving what the company stands for and their products (Apple)
- Monogamous loyalty: 100% loyal to 1 brand
- Polygamous loyalty: brand switcher
How is loyalty built?
- Improving customer experience
- anticipating customer needs
- connecting with customers and having a more personal touch
- Consistently offer high valued products
- Develop loyalty programs with incentives
How is customer loyalty measured?
- Retention (0-10)
- Advocacy (0-10)
- Purchasing (0-10)
