Test 2 Flashcards
Relationship Marketing
It basically sates that it is cheaper to retain a customer than it is to get and find a new one.
You want keep and improve the customer relationship.
Bucket Theory of Marketing
That your business is the bucket and marketers want to keep filling the bucket and they do this by dumping customers into the bucket but there are holes in the bucket and that is people leaving because they are unhappy so you want to focus on plugging those holes up. (relationship Marketing)
4 stages of relationships
Is to build the relationship ladder, First step your acquiring your customer, Second you satisfy that customer, Third you retain that customer, Lastly you enhance that customers experience.
What are the benefits for customers for relationship marketing
Receipt of greater value Confidence benefits: trust confidence in provider reduced anxiety Social benefits: familiarity social support personal relationships Special treatment benefits: special deals price breaks
What are the benefits for relationship marketing for Business Firms?
Economic benefits: increased revenues reduced marketing and administrative costs regular revenue stream Customer behavior benefits: strong word-of-mouth endorsements customer voluntary performance social benefits to other customers mentors to other customers Human resource management benefits: easier jobs for employees social benefits for employees employee retention
Customer loyalty pyramid
bottom- top:
Lead- These are the customers that cost the company money. The complain the most and need the most attention.
Iron- these are the essential customers. they provide the volume, but they are not substantial enough to receive special treatment.
Gold- these customers are not as loyal and want the price discounts. they might be a heavy user but shop where the discounts are.
Platinum-Most profitable heavy users, not really price sensitive, committed to the firm and willing to invest.
Transactional Marketing
Meaning you are more worried about building your customer list and not about taking care of the customers that you already have.
Switching Barriers
Customer Inertia-requires a certain amount of effort. so it is just not worth it to switch.
switching costs:
set up costs, search costs, learning costs, contractual costs
Relationship Bonds
financial bonds- Tied only through finical incentives.
social bonds-seek to build long- term relationships through social and interpersonal and finical bonds.
customization bonds-same as above plus some customization like pandora.
structural bonds- everything from above and specific bonds that are normally formed by using technological stuff that enhances the customers business.
Service Recovery
The physical act of doing something once there has been a service failure
What is the Ice Berg effect
Remember that only 1-5% of people actually complain, and then the whole bottom of the iceberg does not complain and just deals with it.
BAD Hotel Double tree
Remember how the bad hotel experience was very popular and went viral and ruined the hotel.
Service recovery paradox
Is when you have a really bad service failure but then you recover and then that customer is even more satisfied then they would have been.
Passive complainer
They are least likely to take any action, and are unlikely to spread any negative comments through word of mouth. they doubt the effectiveness of complaining.
Voicers Complaining
They actively complain to the service provider, but they are less likely to say negative things via word of mouth. these are the service providers best friends, since they give the company a second chance and let the company know that they did something wrong without loosing there business.
