Chapter 5 - Creating long term loyalty Flashcards
Customer perceived value
The difference between the customer’s benefits and costs, and the perceived alternatives
- based on the difference between benefits the customer gets and costs he or she assumes for different choices.
Satisfaction
A person’s feelings of pleasure or disappointment that results from comparing a product or service’s perceived performance (or outcome) to expectations
- If performance falls short of expectations, person is dissatisfied etc
Loyalty
Deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts
Customer Lifetime Value (CLV)
The net present value of the stream of future profits expected over the customer’s lifetime purchases.
- Company subtracts from its expected revenues the expected costs of attracting, selling, and servicing the customer and apply the appropriate discount rate
Net Promoter Score equation
NPS = %Promoters - %Detractors
How do you attract and retain the right customers?
- Different acquisition methods yield customers with different CLV’s. (ex. discount customers)
- Promotional campaigns that reinforce the value of the brand, is merely likely to attract higher-value customers.
- To retain customers, reduce defection rate by defining and measuring the retention rate, find out why they’re leaving and what you can better do, compare the lost CLV to the costs of reducing the defection rate
The Marketing Funnel
Shows the main steps in attracting and retain customers
- From merely target market, merely aware to highly loyal
- Emphasizes the importance to not only acquire but retain customers
Other ways to retain customers
Interact closely w/ them
Loyalty programs - frequency programs
Brand communities
Customer Relationship Management (CRM)
The process of carefully managing detailed information about individual customers and all customer “touch points” to maximize loyalty.
- Touch points meaning any time the cust encounters the brand/product
- Related to Customer Value Management
- Enables companies to provide excellent customer service thru the use of individual account information (can be controversial)
Customer Value Management
Describes the company’s optimization of the value of its customer base. Focuses on the analysis of individual data on prospects/customers to develop marketing strategies and drive customer behavior
What other features does CRM include?
Personalizing markets
Permission marketing
Customer empowerment
Personalizing markets
making sure the brand nd market is as personally relevant to the customer as possible. Personalizing relationships
Permission marketing
marketing to consumers only after gaining their expressed permission. Respecting consumers wishes
Customer empowerment
giving customers resources and opportunities to demonstrate their passion (think Brisk labels). Provide tangible value for customers to engage
