Services Marketing , CRM & Internet Marketing

1. Services Marketing, CRM & Internet Marketing

2. The service sector • The services sector has been growing at a rate of 10% per annum in recent years • More than half of our GDP is accounted for from the services sector

3. What is a service? • It is intangible. • It does not result in ownership. • It may or may not be attached with a physical product

4. Differences between physical goods and services

5. Most products have a service component They could be • Equipment based • People based – varying skill levels

6. The Goods-Services Continuum Canned foods Ready- made clothes Auto- mobiles Draperies, Carpets Rest- aurant meals Repairs: auto, house, landscaping Air travel Insurance, Consulting, Teaching MOSTLY GOODS MOSTLY SERVICES

7. Services could meet • Personal needs – haircuts, tution • Business needs – courier services, office cleaning services, delivering fresh flowers

8. Characteristics of services • Intangibility • Inseparability • Perishability • Variability

9. The three additional ‘P’s of Service Marketing • People • Physical evidence • Process

10. Differentiation in services • Offering • Faster and better delivery • Image

11. Managing Service quality • Gap between management perceptions and consumer expectations • Gap between management perceptions and service quality specifications • Gap between service quality specifications and service delivery • Gap between service delivery and external communication • Gap between expected service and perceived service

12. Determinants of service quality • Reliability – delivering on promises • Responsiveness – willing to help • Assurance – inspiring trust and confidence • Empathy – individualising customers • Tangibles- physical representation

13. Moments of truth • It is the customer – service encounter • Every positive or negative experience of the consumer would have fall-out on the overall service experience • In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be good, you have to be consistently good

14. Services Monitoring • Continuous auditing of competitor service levels versus own company • Importance - performance analysis

15. Importance – Performance Analysis I M P O R T A C E P E R F O R M A N C E

16. Service quality is directly proportional to employee satisfaction

17. When customers visit a service establishment Their satisfaction will be influenced by • Encounters with service personnel • Appearance and features of service facilities – exterior and interior • Interactions with self service equipment • Characteristics and behaviour of other customers

18. Customer Service Expectations • Desired Service – the ‘wished for’ service • Adequate Service – the service that would be acceptable

19. Zone of Tolerance • Difference between the desired service and the adequate service

20. Service Encounter Themes • Recovery • Adaptability • Spontaneity • Coping

21. Recovery Don’t • Ignore customer • Blame customer • Leave customer to fend for himself • Downgrade • Act as if nothing is wrong • ‘pass the buck’ Do • Acknowledge problem • Explain causes • Apologise • Compensate/upgrade • Lay out options • Take responsibility

22. Adaptability Don’t • Promise and fail to keep them • Show unwillingness to try • Embarrass the customer • Laugh at the customer • Avoid responsibility Do • Recognise the seriousness • Acknowledge • Anticipate • Accommodate • Adjust • Explain rules/policies

23. Spontaneity Don’t • Exhibit impatience • Yell/laugh/swear • Steal from customers • Discriminate • Ignore Do • Take time • Be attentive • Anticipate needs • Listen • Provide information • Show empathy

24. Coping Don’t • Take customer’s dissatisfaction personally • Let customer’s dissatisfaction affect others Do • Listen • Try to accommodate • Explain • Let go of the customer

25. Types of complainers • Passives • Voicers • Irates • Activists

26. Customer complaints • It pays to resolve customer complaints • On an average only 5 % dissatisfied customers complain. Others simply go over to the competitor • A satisfied consumer speaks to an average of 3 people on his her experience • A dissatisfied consumer gripes to on an average 11 persons about his/her unpleasant experience

27. Companies that pay importance to resolving customer complaints • Pay attention to quality and training of manpower recruited • Have clear benchmarks on service quality and communicate to employees • Take remedial steps to improve customer satisfaction and prevent repeats of customer dissatisfaction • Have a data base on customer complaints that is periodically analysed and policies adjusted

28. Satisfied employees will produce satisfied customers • Morale • Motivation • Mood

29. Managing Service Productivity • Giving quality service is an expensive business • Not every consumer is willing to pay extra for service quality • Service providers would have to find their optimum service quality/cost ratios • Can technology substitute part of the labour content? • Can customers substitute part of the labour content? • Making services obsolete by product innovations

30. CRM & Internet Marketing

31. What is Customer Relationship Management (CRM)? Customer Relationship Management (CRM) is the integration of sales, marketing, service and support strategy, process, people and technology to maximize customer acquisition, value, relationships, retention and loyalty. CRM may be viewed as : • A Redesigning of your Business from the Outside In. • Customers, Data and Database at the Center of your Organization (Customer-centricity). • A organization-wide single customer view. • A Foundation for “1to1 Marketing: Treating Different Customers Differently” • A Means to Your Total Customer Development Ends.

32. Why is CRM aCustomer and Competitive Necessity • It typically costs 5-10 times as much to acquire a new customer as it does to retain an existing one. • “Some companies can boost profits by almost 100% by retaining just 5% more of their customers.” Harvard Business Review • A recent McKinsey study showed that the average new customer spends $24.50 at a given web site in the first 3 months as a shopper. The average repeat customer spends $52.50 every 3 months. • Most companies lose 50% of their customers in 5 years • On average only 15% of a site’s customers consider themselves loyal to it. The loyalty rating among people who had experienced a problem was only 6%. • 70% of repeat purchases are made out of indifference to the seller, NOT loyalty. • The web customer is ‘only 1 click away from your competition’.

33. CRM Strategy • A CRM Strategy shows the intent of a firm concerning its customer base, pointing out how it shall acquire, maintain and retain customers through improvement in customer value deliverables as the way to enhance corporate performance.

34. CRM Strategy Development • This involves development of CRM strategic options for achieving established CRM objectives for every targeted segment, thereafter the best option shall be adopted as the CRM strategy and the right measures for performance shall be established.

35. Strategy Development Process Review

36. CRM Strategies Customer Acquisition • Gain the greatest number of new “Best” customers as early in their “lifespan” as possible. Customer Retention • Retain and expand your business and relationships with your customers through up-selling, cross-selling and servicing. Customer Loyalty • Offer programs to ensure that your customers happily buy what you offer only from you. Customer Evangelism Enable loyal customers to become a volunteer sales force. Cost Reduction • Reduce costs related to marketing, sales, customer service and support. Improve Productivity Enhance your e-business strategies.

37. CRM Goals, Benefits and Value  Increased Hard / Soft Results •  Internal: Revenue, Margins, Profitability, Results, ROI, ROA, Conversion Rates, Knowledge, Strategy, Efficiency, Effectiveness, Creativity, Products, Innovation, Morale, Customer Focus. •  External: Customer Acquisition, Up-selling, Cross-selling, Personalization, Interaction, Feedback, Service, Satisfaction, Loyalty, Evangelism, Relationships, Value, Understanding.  Decreased Hard / Soft Results •  Internal: Costs, Time, Errors, Employee Defection, Frustration, Fear, Uncertainty, Doubt. •  External: Customer Issues, Complaints, Attrition, Churn Dissatisfaction.

38. CRM Metrics Response Rates • Well-executed event-driven marketing campaigns typically deliver response rates of the order of 25% - 50%. Increased Sales • A well-used CRM system typically yields a direct sales revenue increase of 10%-20%. Customer Retention • Improvement of Average Observed Customer benefit10%-18% forCustomers That Formally Measured. ROI Justification • Even a10% improvement in customer retention and increased revenues through an increase in customer satisfaction, though small, can provide adequate justification for any company to implement a CRM system.

39. CRM Resources • Websites, E-Zines, White Papers • CRMCommunity.com • CRMGuru.com • DestinationCRM.com (CRM Magazine) • SearchCRM.com • Publications & Articles • CRM Magazine www.DestinationCRM.com • 1 to 1 Magazine www.1to1.com • Customer Inter@ction Solutions Magazine www.cismag.com • Books • CRM Automation, Barton J. Goldenburg • The CRM Handbook, Jill Dyche • The Ultimate CRM Handbook: Strategies and Concepts for Building Enduring Customer Loyalty and Profitability, John G. Freeland • CRM at the Speed of Light: Capturing and Keeping Customers in Internet Real Time, Paul Greenberg

40. Why Internet Marketing ? • Marketers must go where the Customers are. Customers are increasingly going on to the Internet. • The Internet as a medium provides a Marketer opportunities for Interaction as well as Individualization. • The Web offers the advantage of Contextual Placement i.e. placing ads in areas of specific consumer interest. • However, Consumers may be able to screen out many messages. • Also, “Bogus Clicks” may distort utility measurements.

41. |41

42. Forms of Internet Marketing • Web Sites • Microsites ( limited area on the web supplementing a primary site) • Search Ads ( Paid Search/ Pay per click ads) • Display Ads/Banners • Interstitials (ads that pop up between changes on a website) • Internet-specific ads and Videos ( permit uploading) • Sponsorships ( sponsoring specific content) • Alliances and Affiliate programs (two firms working together) • Online Communities (related to firm’s products/services) • E-Mail • Mobile Marketing

43. Social Networks/Word of Mouth • Social Networking has emerged as an important force both in B2B as well as B2C Marketing. A key aspect of this is in its ability to generate Word of Mouth(WOM) publicity. • Two forms to generate WOM are : a) Buzz Marketing b) Viral Marketing

44. Word of Mouth (Contd.) • Buzz Marketing generates excitement, creates publicity and conveys new relevant brand related information through unexpected means. • Viral Marketing encourages consumers to pass along company developed products/services/audio/video or text to others online.

45. Other Internet Marketing Approaches • Opinion Leaders : These are small groups of people who influence others based on their Knowledge (Mavens) or communication/networking (Connectors) or natural persuasive powers (Salesmen). • Blogs : These are regularly updated online journals or diaries and help to spread word of mouth. They bring together people with common interests.