Relationships and Building Loyalty

1. Relationships and Building Loyalty Andrew Sikula Bus 550

2. Customer Loyalty and Profitability • Profit from increased purchases • Profit from reduced operating costs • Profit from referrals to other customers • Profit from price premium

3. Customer Loyalty and Profitability

4. Why are Customers Loyal? • Relationships • Greater Confidence • Social Benefits • Special Treatment

5. Foundation for Loyalty • Target the Right Customer • Value over Volume • Manage Customer Base • Platinum, Gold, Iron, and Lead • Customer Satisfaction and Service Quality

6. Reducing Customer Defections • Analyze Customer Defections • Address Key Churn Factors • Complaint Handling and Service Recovery • Increase Switching Costs

7. Customer Relationship Management • Customization and Personalization • Development and Management of Relationships • Common CRM Failures • Getting CRM Right

8. Discussion • How can PSI address its “lead” customers without jeopardizing its reputation?

9. Question Customer loyalty is an important driver of a service firm’s profitability. The profits derived from loyal customers come from which of the following: • Increased purchases • Reduced operation costs • Referral to other customers • Price premiums • All of the above

10. Thank you