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Customer Value and Customer RelationshipsCustomer ValueMarketing involves satisfying customers needs and wants; the task of any business is to deliver customer value at a profit.Customer ValueThe Value Creation and Delivery Sequence: the three major steps Choose the Value Provide the Value Communicate the ValueCustomer ValueChoose the Value: Activities Customer segmentation Market selection/focus Value positioningOften referred to as Strategic Marketing.Customer ValueProvide the Value: Activities Product development Service development Pricing Sourcing and Making Distributing and ServicingOften referred to as a part of Tactical Marketing.Customer ValueCommunicate the Value: Activities Sales force Sales promotion AdvertisingOften referred to as a part of Tactical Marketing.Customer ValueChoose the Value: Helpful ConceptsSTP: Segmentation, Targeting, Positioning (factors to consider before the product exists, some call it the essence of strategic marketing)3Vs: Value Segment, Value Proposition, Value Network (Kumar of LSB)Customer ValueDefining Value and Satisfaction:Customers always seek to gain the greatest benefit at the least cost.Customer ValueDefining Value and Satisfaction: Key ConceptsCustomer Perceived Value (CPV): customers evaluation of all of the benefits and costs of an offering.Total Customer Benefit: perceived monetary value of all of the benefits a customer expects from an offering.Total Customer Cost: perceived bundle of costs a customer expects to incur from an offering.Customer ValueTotal Customer Cost: Monetary cost Time cost Energy cost Psychic cost Total Customer Benefit: Product value Services value Personal value Image valueCustomer ValueSteps in Customer Value Analysis: 1. Identify the major attributes and benefits that customers value. 2. Assess the quantitative importance of the different attributes and benefits. 3. Assess the companys and competitors performances on the different customer values against their rated importance. 4. Examine how customers in a specific segment rate the companys performance against a specific major competitor on an individual attribute or benefit basis. 5. Monitor customer values over time.Customer ValueAnother important activity is cultivating customer loyalty.Loyalty: deeply held commitment to re-buy or re- patronize a preferred product or service in the future despite situational influences and/or competitors marketing efforts to entice switching.The key to cultivating loyalty is “delivering high customer value”.Customer ValueConcepts to remember:Value proposition: the whole cluster benefits the company promises to deliver.Value deliver system: all of the experiences the customer will have on the way to obtaining and using the product or service.Customer ValueCustomer satisfaction is important too!Satisfaction is determined by whether the product/services performance meets or surpasses expectations.Customer ValueFactors that shape customer expectations: Past buying experiences Friends and associates advice Marketers and competitors information and promisesIf you raise expectations too high, the customer is likely to be disappointed. If you set expectations too low, customers may ignore your product/service.Customer ValueSatisfaction also depends on quality.Quality: the totality of features and characteristics of a product/service.Customer ValueMarketers six roles in helping define and deliver high quality to customers:1.Bear the major responsibility for correctly identifying the customers needs and requirements. 2.Communicate customer expectations properly to product/service designers. 3.Make sure that customers orders are filled correctly and on time. 4.Ensure that customers receive the proper instructions, training, technical assistance in the use of the product/service. 5.Stay in touch with customers after the sale to ensure their satisfaction. 6.Gather customer ideas for product/service improvements and deliver them to the proper departments.Customer ValueYou should measure customer satisfaction regularly.Satisfaction and loyalty tend to be linked.High satisfaction often creates an emotional bond with the product/service.Customer RelationshipsMaximizing value of your customers means creating and cultivating long term customer relationships.Instilling loyalty in your customers is the key.Customer RelationshipsThe Five Levels of Relationship Marketing:Basic marketing: selling the product/service (most common). Reactive marketing: selling the product/service and encouraging customers to offer questions, comments, or complaints. Accountable marketing: following up after the sale to see whether the product/service meets expectations and ask for improvement suggestions and specific disappointments. Proactive marketing: contracting customers periodically with suggestions about new product/service uses or new products/services. Partnership marketing: working continuously with customers t
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