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.
Irate’s Complaining
These are most likely than others to be involved with negative word of mouth. The do complain to the provider and believe in complaining can have it’s social benefits. they are also less likely to give the provider a second chance.
ACTIVISTS complaining
They are characterized above average on all dimensions of complaints/ they will tell others, they are more likely than all others to complain to a third party group.
which comes first fix the problem or fix the customer?
You first fix the customer then the problem
what are the 3 kinds of fairness
Outcome- matching the level of the complaint with the same level of compensation.
Procedural- in addition the customer should be treated with all the fairness of a timely response to there complaint.
Interracial-above and beyond
Service Guarantee
Unconditional
Meaningful
Easy to Understand
Easy to Invoke
Benefits of service guarantees
A good guarantee forces the company to focus on its customers.
An effective guarantee sets clear standards for the organization.
A good guarantee generates immediate and relevant feedback from customers.
When the guarantee is invoked there is an instant opportunity to recover.
Information generated through the guarantee can be tracked and integrated into continuous improvement efforts.
A service guarantee reduces customers’ sense of risk and builds confidence in the organization.
Reasons companies might NOT want to offer a service guarantee
Existing service quality is poor
A guarantee does not fit the company’s image
Service quality is truly uncontrollable
Potential exists for customer abuse of the guarantee
Costs of the guarantee outweigh the benefits
Customers perceive little risk in the service
Risks of Relying on Words Alone to Describe Services
Oversimplification
Incompleteness
Subjectivity
Biased Interpretation
User-centered
Services should be experienced and designed through the customers eyes
Cocreative
All stakeholders should be included in the service design process
Sequencing
A service should be visualized as a sequence of interrelated actions
Evidencing
: A service should be visualized as a sequence of interrelated actions
Holistic
The entre environment of a service should be considered
Types of service offering innovations
Major or radical innovations Start-up businesses New services for the currently served market Service line extensions Service improvements Style changes
Look at figure 8.1 and 8.2
need to know basics
Service Blueprinting
A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customer’s point of view.
what do the lines mean on a service blue print
Top line is the line of interaction
middle line is the the line of visibility
last line is the line of interaction
Benefits for a service blue print
Provides a platform for innovation.
Recognizes roles and interdependencies among functions, people, and organizations.
Facilitates both strategic and tactical innovations.
Transfers and stores innovation and service knowledge.
Designs moments of truth from the customer’s point of view.
Suggests critical points for measurement and feedback in the service process.
Clarifies competitive positioning.
Provides understanding of the ideal customer experience.
