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Chapter Twelve

Chapter Twelve. Customer Retention. Beyond Customer Satisfaction. Brand Loyalty. Repeat Purchase Behavior. Levels Of Satisfaction. Excited. Ideal. Pleased. Desired. Okay. Predicted. Irritated. Dissatisfied. Adequate. Levels Of Expectations. Angry. Level of Service Quality.

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Chapter Twelve

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  1. Chapter Twelve Customer Retention

  2. Beyond Customer Satisfaction Brand Loyalty Repeat Purchase Behavior

  3. Levels Of Satisfaction Excited Ideal Pleased Desired Okay Predicted Irritated Dissatisfied Adequate Levels Of Expectations Angry Level of Service Quality

  4. The Customer Value Package • Price • Technical S.Q. • Functional S.Q. • Firm Image Best Combination

  5. Six Steps for Developing and Managing the Customer Value Package • Determine relative weights customers place on each element. • Determine value package company will offer. • Corporate objectives and mission should emphasize value package. • Communicate value package to company personnel. • Develop plans to implement value package. • Monitor the marketplace for changes.

  6. Customer Value Package Questions to Determine Relative Weights • What are minimum requirements to be considered a viable source? • What level of performance would give a vendor a competitive advantage? • What additional services would provide added value? • What problems are experienced now with the current vendor? • What needs are not met by the current vendor?

  7. Operational Position Future Purchase Behavior Cost Efficiency Service Quality Customization Repeat Purchase Behavior Brand Loyalty

  8. Customers Repeat Purchase Behavior Brand Loyalty • Provide a high level of service quality. • Use advertising to promote the firm or brand image. • Offer guarantees. • Develop relationships with customers. • Personalize the service encounter. • Offer price incentives. • Offer sales promotions. • Offer frequency programs. • Provide good service. • Make the service convenient for the customer.

  9. Compatibility Management • Attract a homogeneous group of consumers • Prepare for arrival of customers • Set acceptable rules of behavior • Manage customer-to-customer interactions

  10. Compatibility Management Roles • Second Stage • Environmental Engineer • Legislator • Third Stage • Matchmaker • Santa Claus • Police Officer • Cheerleader

  11. Lifetime Value of a Customer • Average expenditure • Average number of purchases per year • Average number of years • Consumer customers • Business customers • Defection rate

  12. Value of Customers over Time • Replacing a defector with a new customer costs six times more. • Customers tend to use a service more over time. • Service firms become more efficient in serving a regular customer. • Customers refer others to the firm. • Firms can increase their prices due to quality, dependable service.

  13. Defections Management • Don’t try to eliminate all defections • Watch for defectors • Develop a service recovery program • Create zero-defections culture • Unconditional guarantee

  14. Service Recovery • Develop service recovery program • Encourage customers to complain • Collect data • Correct problems that lead to failures • Allocate resources to service recovery

  15. Relationship Marketing Long-Term Relationship • Build brand loyalty • Service quality or customization operational positions • Meet customer needs • Solve customer problems • Develop relationships with customers • Provide positive benefits to customers

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