3: Creating Customer Value, Satisfaction and Loyalty Flashcards
What are the steps when you go from perceived value to customer loyalty?
1) Benefits & Costs
2) Perceived Value
3) Satisfaction
4) Loyalty
What is the definition of Customer-Perceived value?
The difference between the prospective customer’s evaluation of all the benefits (i.e., an indicator of quality) and all the costs of a company’s offering and the perceived alternatives.
What are the steps in a customer-perceived value analysis?
- Identify major benefits that are values by customers (and costs)
- Assess the importance of the different benefits (and costs)
- Assess the company’s and competitors’s performances on the benefits (and costs) against their rated importance.
- Examine how customers in specific segments rate the company’s performance against specific competitors on a benefit (and cost) basis
- Monitor customer-perceived values (i.e., perceived benefits and perceived costs) over time
What leads to dissatisfaction in Customer Satisfaction?
When your Pre-purchase expectations have an negative disconfirmation with the perception of the actual outcome.
What leads to satisfaction in Customer Satisfaction?
When your pre-purchase expectations are confirmed or have a positive disconfirmation with the perception of the actual outcome.
How do buyers form expectations?
Expectations result from past buying experience, friends’ and associates’ advice, as well as marketers’ and competitors’ information and promises.
Why is customer satisfaction important?
Because satisfied customers..
- stay loyal longer and pay less attention to competing brands
- buy more as the company introduces new market offerings and upgrades existing ones
- promote the company by word of mouth
- cost less to serve than new customers
- are less sensitive to price
How can you deal with customer dissatisfaction?
- Receive and act on complaints (e.g., hotline)
- Contact the complaining customer as soon as possible
- Accept responsibility for the customer’s disappointment
- Use empathetic customer service people
- Resolve the complaint to the customer’s satisfaction quickly
What is customer 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.
Why do customers become loyal?
- Psychological factors (e.g., personal relations and attachment)
- Situational factors (e.g., closeness to home)
- Contractual factors (e.g., cell phone)
- Technical and functional factors (e.g., software compatibility)
- Economic factors (e.g., high switching costs)
What is Customer Relationship Management (CRM)?
Customer Relationship Management (CRM) is the process of carefully managing detailed information about individual customers and all customer ‘touchpoints’ to maximize customer loyalty; this includes creating, maintaining, and enhancing strong relationships.
CRM includes all management processes that aim to initiate, stabilize, intensify and recover relationships with customers (and other stakeholders) of a company (Bruhn 2008).
What is a “Customer touchpoint”?
Customer touchpoint is any occasion on which a customer encounters the brand or the product.
What are the three stages is CRM?
- Customer acquisition
- Customer retention
- Customer recovery
Why is CRM important?
- Customer relationships are the most important asset to companies
- The profit gained from customers can increase over time
- Different strategies can be used to recruit customers, retain customers, and recover customers
How should you act in a CRM?
1) Identify prospects and customers
2) Differentiate customers by needs and value to company
3) Interact with individual customers
4) Customize products and services for each customer
