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Building Profitable Customer Relationships: Principles and Tools

This introduction to Customer Relationship Management (CRM) discusses the process of creating and maintaining profitable customer relationships by delivering superior value and satisfaction. Topics covered include customer value judgments, satisfaction, loyalty, and relationship-building tools such as customer profitability analysis and consumer-generated marketing practices. The focus is on understanding and meeting customer needs effectively to enhance loyalty and profitability.

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Building Profitable Customer Relationships: Principles and Tools

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  1. Introduction to Customer Relationship Management Tonie G. Tagulao, MAT 05/08/2019

  2. SAMPLE FOCUS… What were the big NOs in the situation?

  3. We are all customers of a sort Share your stories… (10 minutes)  In groups of 4 people  Share your best and worst experiences

  4. Perceptions in Customer Relations NEW SHIFTS & CONDITIONS: Organic Growth VS Transactional Growth Courtship VS Courtesy Relationship and Trust VS Satisfaction People building VS Product selling

  5. CUSTOMER RELATIONSHIP MANAGEMENT Introduction & Principles

  6. the over- all process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers. -Kotler & Armstrong, 2012-

  7. 1. CREATING & BUILDING RELATIONSHIPS Building Blocks • Customer Value • How customers make value judgments of costs and benefits when making their product decisions • Satisfaction • The meeting(or not) of customer expectations relative to their perception of the product’s performance

  8. UnderstandingCUSTOMER VALUE • KEY ASSUMPTIONS • Customers do not judge value accurately • Generally, they do not judge objectively • All value judgements are perceived • All judgements are made as a result of comparisons with competing choices • ACTION: • Find the CUSTOMER’s YES and win it.

  9. UnderstandingCUSTOMER SATISFACTION • Actions & Outcomes by Customer-centered Firms • Achieving customer satisfaction means promising only what the business can deliver, and delivering more than what was promised • Focus on meeting customer value profitably NOT maximizing customer satisfaction • Higher customer satisfaction increases customer loyalty • Satisfied customers become marketing partners and customer “evangelists”

  10. Relationship Creation Tools • Customer Profitability Analysis  Measures that involve screening and weeding out potentially unprofitable customers • Customer Divestment Practices  Measures for “dumping” unprofitable customers • Customer-managed relationships • Marketing measures/ practices that give customers greater power and control by creating more dialogue with them (ex. online interactions) • Partner relationship management • Marketers can’t create and deliver customer value alone; they need other company departments and outside partners to help them

  11. Customer Relationship Tools • Consumer-generated marketing • Practices that allow consumers themselves to play a bigger role in shaping their own brand experiences and those of others • uses uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, other digital platforms, consumer-created ads, etc. • Beyond creating brand conversations, customers are having an increasing say about everything from product design, usage, and packaging to pricing and distribution.

  12. 2. SUSTAINING RELATIONSHIPS & PROFITING Building Blocks • Customer Loyalty • The creation of customer delight which leads to a willingness to be loyal and talk about the company and its products • Customer Retention • Keeping customer lifetime value by avoiding the lose of the entire stream of purchases that the customer would make over a lifetime of patronage • increasing customer market share & equity

  13. Building Loyalty & Expanding Retention • Customer Service • the advice or assistance a company gives its customers; goal: increase satisfaction • Customer Care • Is how well customers are taken care of while interacting with the brand; goal: build emotional connection • Customer Experience • sum of all contact, from first discovering and researching a product to shopping and purchasing to actually using the product and following up with the brand afterwards.  • Goal: overall connection with customers

  14. Core Principles of Customer Service

  15. Pointers (Final) Topics: Implementing Marketing Mix Decisions – Collateral Design Marketing Performance Evaluation Intro and Principles of Customer Behavior Intro and Principles to Customer Relationship Management Type of Test Identification Multiple Choice Sample/ Situational Analysis Essay

  16. 5 Principles of Customer Care

  17. Choosing Right Relationships NOTE: • Not all loyal customers are worth keeping • Loyal customers are judged based on profitability and potential loyalty

  18. Today’s Marketing Landscape The Frugality comeback! Expect More. Pay less. Online Marketing Shop anywhere, anytime. Rapid Globalization Sourcing, marketing, shopping gone global.

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