Chapter #1: Intro to Market Based Management Flashcards
What are the 5 steps for market based management?
1) Customer focus (measure performance)
2) Analysis of markets (competitive position)
3) Tactical MKT based strategies (4Ps)
4) Strategic view of where we are and where we want to go
5) Implementation of MKT strategies (& financial impact)
What are two trending reasons that customers these days are less brand loyal?
They expect more and have more choices
Why should a company maintain a customer focused organisation?
To outperform competition
To consistently improve consumer satisfaction
and therefore…
Realise higher profit $$$
High levels of customer satisfaction drive ____________.
Customer profitability
Why do we work to identify customer profitability?
To find who to attract and who to avoid
What does CSI stand for?
Customer satisfaction Index
What is the Customer Satisfaction Index (CSI)?
The average of all customer satisfaction ratings
Why do we calculate a company’s CSI?
It helps to forecast future revenue and profit
What makes a good CSI metric?
- Past CSI metrics
- Against objective
- Against competitors
Why is it important to manage customer dissatisfaction?
Customer retention increases profit
Why do we want to keep a high percentage of satisfied customers
Satisfied customers buy more at a higher profit margin = overall higher profit margin for the business
What percentage of customers are likely to share their positive experience when they had a positive experience?
25%
What percentage of customers are likely to share their negative experience when they had a negative experience?
65%
What percentage of customers who have a positive experience will tell 10 or more people about it?
23%
What percentage of customers who have a negative experience will tell 10 or more people about it?
48%
To estimate customer retention rates, a business will……
Conduct a customer survey
Customer lifetime value increases exponentially with increases in __________
Customer retention
Increases in customer retention in turn exponentially increases ____________.
Customer lifetime value
Loyal customers typically have what impact on a business?
- Longer customer history
- More committed to company/brad
- Buy more
- More likely to recommend the brand
Loyal customers have what 5 characteristics?
1) Long customer history
2) Above average purchase amount
3) High desire to repurchase (commitment)
4) Strong product preferences (over competitor options)
5) Would recommend the product/brand
What are loyal customers?
Loyal customers are high performance customers who satisfy the 5 loyal customer characteristics
What are repeat customers?
Great customers who buy often but score lower on purchase amount, product preference and customer recommendations
What are captive customers?
Have a long customer history and average purchase amount but would leave if they could (they are dissatisfied captive customers)
What are new customers?
Score low on all aspects of customer loyalty as they do not yet have the customer history to assess loyalty
What are unprofitable customers?
Score low on all aspects of customer loyalty
What is the goal of relationship marketing?
To manage the 5 customer loyalty classifications and obtain a higher overall level of loyalty and profitability
Unprofitable customers are the result of ____________
Mismanaged customer selection - best approach (and hardest) is to help them leave
New customers (first time or returning) require __________
Critical care. They have high expectations that need to be managed to lift their level of customer loyalty
Loyal customers should be managed by ________
Being rewarded with special offers and service that are not offered to other customers
