Module A - Step 5 Flashcards
What is the Fifth step of the Marketing Process?
Capturing value from customers.
In what forms does the company capture value from customers?
Sales, Profits, Customer lifetime value, Equity
(Other examples: Share of customer, Market share)
How can a company create and keep customers loyal?
- Give reasons to be loyal
- An engaging loyalty program
- Great customer service
- Positive after-sales experience
What is Customer Lifetime Value?
It is the wealth that a customer contributes over his lifetime relationship with the company.
What is Share of Customer?
The portion of a customer’s purchasing power contributed to the company’s product or service.
What is Equity?
The total customer lifetime values of all the company’s current and potential customers (all customers in the database)
What increases a company’s Equity?
Building relationships with the right customers, making the right customers loyal and therefore increasing equity.
Note:
(Not all customers are good investments)
What are the types of Customer Relationship Groups?
Strangers - (low loyalty, low profitability)
Barnacles - (high loyalty, low profitability)
Butterflies - (low loyalty, high profitability)
True Friends - (high loyalty, high profitability)
Explain: Strangers (Customer Relationship Groups)
Tend to complain a lot and are not loyal to the company, not worth investing time and resources to develop relationships with them.
Explain: Barnacles (Customer Relationship Groups)
Highly loyal but not very profitable, their wants fail to align properly with the company’s offerings.
Raising fees or reducing service can improve profitability, if not, they should be fired.
Explain: Butterflies (Customer Relationship Groups)
Highly profitable but not loyal, companies should capture as much profit as possible before these customers move on.
Explain: True Friends (Customer Relationship Groups)
Highly profitable and very loyal to the company. A lot of investments should be made to build relationships with these customers.
