Powerpoint 2: Customer Analysis Flashcards
meal kit startups
Blue apron,
customer retention problem
Nike’s acquisition of Zodiac
zodiac is the consumer data analytics company.
helps them forecast individual CLV customers lifetime value.
Fader helped!
How to increase customer base CLV
increasing customer base CLV:
(1) Customer Acquisition
(2) Customer Expansion
(3) Customer Retention
how to increase customer retention:
- customer satisfaction
- customer loyalty
- higher switching costs
- bundling
- contracts
Customer equity
see image 4
- make sure to have financial and strategic value of customers
- (1) Direct value (2) information value (3) Communication value (4) relationship value
The AIDA funnel
see image 5
you lose customers at each step so to increase customer base, try to eliminate space.
- has some lacking
The AIDA funnel lacks:
(1) basically only about acquisition. Emphasis on influence/sales closure/acquisition and not customer experience and CLV
- no post purchase phase or repeat purchase
(2) fails to capture all touch points. like digital/social channels. well- informed customers
(3) action is NOT the finish line
The Customer Journey; The loyalty loop
see image 6
- initial consideration set
- active evaluation
- moment of purchase
- trigger
initial consideration set
Evoked short-list of brands to fulfill need/solve problem
-ands in initial consideration set is 3X more likely to be purchased than brands added later (other brands can be added in active evaluation)
active evaluation
people add subtract brands as they evaluate options
Prospect theory
actually losses are harder than gains. “loss aversion”
see image 7
- Va l u e i s j u d ge d b y changesrelative to a reference point
cash back twice citi
example of loss eversion thing
customers get 2 gains and 1 loss
Post purchase experience
Consumers collect information online AFTER purchase!•Satisfaction•Performance/quality –not highly predictive•Va l ue r a t i o•Equity/Fairness•Expectations/Disconfirmation
disconfirmation
satisfaction/ or dissatisfaction is confirmed if expectations are exceeded or not
triggers examples
(1) amazon prime
(2) amazon buttons,
(3) Starbucks rewards
Loyalty
(1) active
(2) passive
active loyalty
- brand advocate
- emotional connection
- net promoters
passive loyalty
- habitual
- no word of mouth
- open to switching
assumptions
(1) No reference-point dependence:
(2) No Loss Aversion
(3) No Diminishing Marginal Value
(4) Effort Optimization
(1) No reference-point dependence:
customers have well-articulated valuations of the offerings’ performance on different attributes like difference between the “regular” and the “sale” price or the “new and improved” product development strategy
(4) Effort Optimization
buyers consider all available information about an offering in a systematic fashion. Heuristics - buyer takes shortcuts to minimizing decision effort like satisficing - selecting the first option that meets the buyers’ criteria without necessarily considering all of the available options or elimination-by-aspects - reducing the number of attributes on which they evaluate the available options.
Points of difference
involve attributes that are important for target customers and on which the company’s offering is perceived to be different from that of its competitors.
competitive advantage, disadvantage, which reflects important attributes on which an offering dominates the competition
Points of parity,
on the other hand, refer to attributes on which an offering’s performance matches that of the competition.
Strategies for Creating Superior Customer Value:
think value function
VA = f(wi, ai)
Improve the offering’s performance on a given attribute (a) Like speed of software
Add a new attribute on which the offering has an advantage. (increase i)
Increase the perceived importance of an attribute on which the offering has an advantage. (w)
types of framing
Noncomparative framing:
(1) Need-based framing - particular customer need. For example, Coca-Cola’s (1929) positioning as “the pause that refreshes” appealed directly to customers’ need for a refreshment
(2) User-based framing - particular type of buyer. Eg. upper class or Honda’s (1963) campaign You Meet The Nicest People on a Honda
(3) Category-based framing - relating it to an already established product category. For example, Coca-Cola’s (1906) positioning as The great national temperance beverage
(4) Comparative framing: ( usually niche offerings trying to gain market share from market leader or companies targeting new customer segments )
(5) Competitive framing - explicitly contrasting it to competitors’ offerings
(6) Product-line framing - comparing it to other offerings in the company’s product line.
how to increase profit growth
increase sales revenue or lower costs increase sales volume (1) market growth (new customers) (2) steal share (3) market penetration (awareness, attractiveness, affordabilityavailibilitym) decrease adoption gaps
how to close awareness gap
improving company communications, involve its collaborators in creating awareness, foster third-party communications
how to close attractiveness gap
improving the benefits of the offering, reformulating/redesigning, temporary incentives, improving communication and samples
how to close affordability gap
orrecting price misperceptions, lowering cost
how to close availabiltiy gap
ramping up production to meet demand, improving the geographical coverage of distribution channels
how to close purchasing gap
introducing time-sensitive incentives, such as short-lived price discounts, coupons, and financing options.
increase sales by managing usage
satisfaction usage freuquency usage quantity replacement frequency availability
how to close satisfaction gap
enhancing the benefits and reducing the costs of the offering, adding variants to the offering’s product line to reduce boredom and address variety seeking
how to close Usage-frequency gaps
: increasing the frequency, identifying new ways to use the offering eg. Arm & Hammer promotes baking soda not only for baking but also as a household cleaner and deodorizer.
how to close Usage-quantity gaps:
educating customers about the optimal usage quantity.
how to close
Replacement-frequency gaps
: increasing the frequency with which customers replace the product. Eg. Gillette added blue bristles on its Oral-B Indicator toothbrush, which fade to alert users that they need to replace their brush.
how to close Availability gaps
: ensuring continuous consumption without disruptions like toner-levels in printers.
