principlesofmarketing-chapter2-1708101623343.pptx

CHAPTER 2
CUSTOMER RELATIONSHIP:
CUSTOMER SERVICE
Lesson 1:
Relationship Marketing

RELATIONSHIP MARKETING
According to Serrano,
Relationship Marketing includes
activities aimed at developing
and managing trusting and long-
term relationships with larger
customers. (Customer profile,
buying patterns and history of
contacts are kept in a sales
database)

RELATIONSHIP MARKETING
Relationship marketing is a strategy
designed for customer loyalty,
interaction, and long-term
engagement to be fostered.
Customer Relationship focuses
more on long-term customer
retention than acquiring large
numbers of new and potentially
single-transaction customers.

Characteristics of Relationship Marketing:
1. It focuses on the long-term rather than the short-term.
2. It focuses on partners and customers rather than on the
company’s products.
3. It puts more emphasis on customer retention and growth
than on
customer acquisition.
4. It relies on cross-functional teams rather than on
departmental-level work.
5. It relies more on listening and learning than on talking.
Relationship Marketing is designed to develop strong connections
with customers by providing them with information directly suited
to their needs and interests by promoting open communication.

Relationship
marketing calls for
new practices within
the 4p’s.

THIS IS A SLIDE title
▹Here you have a list of items
▹And some text
▹But remember not to overload
your slides with content
Your audience will listen to you or
read the content, but won’t do
both.

▹More products are customized to the
customers’ preferences.
▹New products are developed and
designed cooperatively with suppliers
and distributors.

▹The company will set a price based on the
relationship with the customer and the bundle of
features and services ordered by the customer.
▹In business-to-business marketing, there is more
negotiation because products are often designed
for each customer.
PRICE

▹RM favors more direct marketing to the
customer, thus reducing the role of
middlemen.
▹RM favors offering alternatives to customers
to choose the way they want to order, pay for,
receive, install, and even repair the product.
PLACE

▹RM favors more individual communication and dialogue
with customers.
▹RM favors more integrated marketing communications to
deliver the same promise and image to the customer.
▹RM sets up extranets with large customers to facilitate
information exchange, joint planning, ordering, and payments
PROMOTION

In the business world,
retaining customers has
a lesser cost at least
eight times compared
to acquiring new ones.
Thus, this marketing
capitalizes on the same
fact and is beneficial to
the company in several
ways.
.
BENEFITS OF RELATIONSHIP MARKETING

1. Understanding customer
characteristics
the company can
segregate its customers into
groups based on their
characteristics like
purchasing power,
frequency and volume of
sale transactions. It also
helps the company get
valuable feedback from its
customers and understand
their needs and
expectations.
2. Delivery and
meeting expectations
if the company knows
what its customers’ needs
are, it will help reduce
wastage due to trial and
error methods. It is easier
to create a product if the
features and
specifications of the
product are known.

3. Repeat
Business
Sellers should
maintain good
attitude to the
buyers. By doing
this, buyers will
feel that they do
not need to switch
sellers.
4. Prevents negative
transition
trust and loyalty go
hand in hand and it is
super beneficial for
all business. It will
help prevent
customers from
turning to
competitors.
5. Word-of-mouth
marketing
a happy customer
will always
promote business
by telling ten other
people about the
amazing services or
performance
received from a
company.

6. Increasing customer base
satisfied existing customer is 100%
more likely to recommend a
product/service to a prospective
customer. Apart from customer,
referrals, there are several other
ways to increase customer
satisfaction by employing methods
of utilizing social networking
websites, blogs, informal surveys,
benefits on loyalty cards, timely
response to complaints and
requests as a constant reminder of
its presence around and retention
equity is improved by enhancing
customer satisfaction.
7. Reduced marketing cost
Benefits also include lesser
marketing costs and more value
creation. This can be explained by
stating the following statistics:
every 5% increase in customer
retention can increase a
company’s annual profits from at
least 25% to as much as 125%,
while simultaneously leading to a
reduction of 10% in marketing
costs. An existing customer will
spend 33% more than a new
customer to buy a company’s
product/service.

8. Minimization of
customer price
sensitivity
a happy customer
will be willing to
pay more for a
product if there is a
guaranteed
satisfaction of
products and after
sales services
attached to the
price.
.
9. Identification with the
company
the benefits are reaped
both by the company and
the customers. It helps
customers identify more
with the company. Keeping
your communication lines
open and keeping in touch
with the customers makes
them feel like they are
being valued. It will keep
customers coming in and
build brand equity for the
company in the long run.
10. Product Market
Expansion
the company’s
employees must be
ready to deliver
beyond the
company’s
boundaries on
customer demand.

▹Examples of companies using
relationship marketing
▹Ikea
▹Direct recruitment
▹American airlines
▹Dell
▹Vyvanse

CHAPTER 2
CUSTOMER SERVICE
Lesson 2:
Customer Value

CUSTOMER VALUE
Customer Value is the relationship
between benefits and the costs including money,
stress, and time to sacrifice that is necessary to
get those benefits.
Or simply stated in a mathematical equation:
Benefits – Cost = Customer Value

In essence, customer value entails extraordinary delivery of four
value-points or components known also as SQIP:
SERVICE the intangible value offered to customers.

QUALITY customer’s perception of how well a company’s
products and services meet expectations

IMAGE customers’ perception of the company or business
they interact with

PRICE the price a company can command for its products
and services that its customers are able and willing to pay.

1. Provide consumer with
the best cost.
2. Provide the consumer
with the best product.
3. Provide the consumer
with the best service.
Three ways a
company can
establish
customer
value to its
customer
base:
DELIVERING
CUSTOMER
VALUE

Importance of Customer Value
1. Designing and
providing superior
customer value are the
keys to successful
business strategy in the
21st century.
2. Value reigns
supreme in today’s
marketplace and
market-space.
3. Customers will not
pay more than a
product is worth and
will reward excellence.
4. A customer-centric
culture provides focus
and direction for the
organization, ensuring
that exceptional value
will be offered to
customers.
5. Designing and
delivering superior
customer value propels
organizations to market
leadership positions in
today’s highly
competitive global
markets – absolute
advantage
6. Providing
outstanding customer
value has become a
mandate for
management.

Importance of Customer Value
7. In choice-filled
arenas, the balance of
power has shifted from
companies to value-
seeking customers.
8. Managing customer
value is even more
critical to organizations
in the new service and
information-based
economy
9. Firms not providing
adequate value to
customers will struggle
or disappear –
customer value is a key
ingredient in building
competitive advantage.
10. Today’s customers are quite
smart and sophisticated and are
looking for companies that::
a. Create maximum value for them
based on their needs and wants,
and
b. Demonstrate that they value
their business.

thanks!
CREATING MORE CUSTOMER VALUE?
▹Understand what drives value for customers
▹Understand value proposition
▹Identify the customers and segments where the
company can create more value relative to
competitors
▹Create a win-win price
▹Focus investments on the most valuable
customers

CHAPTER 2
CUSTOMER SERVICE
Lesson 3:
Customer Relationship
Development Strategies

Benefits of Developing Customer Relationship
Customer Relationship is a marketing
approach that focuses on creating an
ongoing and long-term relationship with
customers.

Benefits in developing and implementing
customer relationship
1. Consistent customer experience
Customer Lifecycle Journey

2.Customer
feedback

3.Customer Profitability

4.Customer advocate

5. Innovation

5. Innovation
4. Customer advocate
3. Customer Profitability
2. Customer Feedback
1. Consistent customer experience

1. Make every customer interaction count
Strategies in Developing Customer Relationship

2. Follow-through on commitments and claims
about products or services.

3. Develop Employees.

4. Offer benefits and product value that responds
to the customer’s desires.

5. Treat customers as individual who are respected
and valued.

6. Listen to customer.

7. Build a strong brand identity.

8. Surround customers with valuable information by using emails,
websites, content, social media, and other methods of outreach but do
not be invasive.

9. The business must have a website.

10. Reward loyal customers.

11. Nothing strengthens a bond more that
appreciation.

12. Create a blog about the business where discuss
is more casual and inviting.

5. Treat customers as individual who are
respected and valued.
4. Offer benefits and product value that
responds to the customer’s desires.
3. Develop Employees.
2. Follow-through on commitments and
claims about products or services.
1. Make every customer interaction count
6. Listen to customer.

9. The business must have a website.
10. Reward loyal customers.
11. Nothing strengthens a bond more that
appreciation.
12. Create a blog about the business where
discuss is more casual and inviting.
8. Surround customers with valuable
information by using emails, websites, content,
social media, and other methods of outreach
but do not be invasive.
7. Build a strong brand identity.

CHAPTER 2
CUSTOMER SERVICE
Lesson 4: Customer Service
Strategy in the Philippine
Business Enterprise

Customer Service Strategy
CUSTOMER SERVICE is the act of taking care of
the customer’s needs by providing and delivering
professional, helpful, high quality service and
assistance before, during, and after the customer’s
requirements are met.

Elements of the Customer Service strategy:
1. A vision for customer service

2. Assessing customer needs

3. Hiring for Service

4. Organizational goals for customer service

5. Customer Service Training

6. Employee Accountability

7. Rewarding Good Service

THE SUKI SYSTEM IN THE PHILIPPINES

SUKI SYSTEM system of
patronage in which a customer
regularly buys their
merchandise from a certain
client.

SUKI – a partner system of doing
business in the Philippines, wherein a
customer buys certain products from a
particular vendor, who in turn offers
discounts and other perks for such
exclusivity. Filipinos use the word suki to
refer to both buyers and sellers,
indicating their equal roles and
obligations in an eponymous relationship.

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