Customer Satisfaction and Loyalty by ewghwehws

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									    Customer Value,
Satisfaction and Loyalty
The New “Managerial Paradigm”
  Amazon epitomizes the
“Customer-Oriented” Model
So does Jones Soda…
So does Threadless…
                                  Value
• Benefits (actual or perceived)
   – Come from features or product attributes
   – May be economic, social or personal


• Costs (actual or perceived)
   – Economic/Financial
       • Money
       • Time
       • Resources
   – Social/Personal
       • Aggravation, worry, feelings of uncertainty, distress
       • Social embarrassment, inferiority


• The Value Equation:             Value = Benefits - Costs
           The Value Proposition




           The whole cluster of benefits the
company promises to deliver less the associated total cost.
              Loyalty


   A deeply held commitment to re-buy
   or re-patronize a preferred product
or service in the future despite exposure
 to situational influences and marketing
  efforts that have the potential to cause
             switching behavior.
  The Customer-Development Process
Suspects


Prospects       Disqualified


First-time       Repeat
customers       customers      Clients   Members


                                         Partners
           Ex-customers
JetBlue has loyal customers
               Question du Jour

Is it better to reward your most or least loyal customers?
             Customer Satisfaction
• Two components
   – Cognitive (thinking, reasoning, logic)
   – Affective (emotional)


• Driven by Performance vs. Expectations Gap

• Articulation Issues
   – Consumers can almost always articulate the reasons for their
     dissatisfaction
   – Sometimes harder for consumers to articulate why they are
     satisfied
Measuring Satisfaction
   Periodic Surveys

      Customer Loss Rate &
            Returns


              Mystery Shoppers


                      Word of Mouth
Product and Service Quality


Quality is the totality of features and
  characteristics of a product or
      service that bear on its
            ability to satisfy
      stated or implied needs.
        Quality




Conformance   Performance
  quality        quality
Customer Acquisition & Retention
• Acquisition of new customers is almost always
  far more expensive than retaining current
  customers.
• Consumers aren’t as brand loyal as they used
  to be.
• Small reductions in customer churn can have
  huge implications for profit gain.
• Customer profitability tends to increase over
  the life of a retained customer.
             Quality Exercise
• How do consumers typically define QUALITY
  for the following products?
  – Flights
  – Dinner Out
  – Cars
  – Computers
  – Medical Services
  – Artwork
  – Hotel Stays

								
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