Post Purchase, Customer/Consumer Satisfaction and Commitment/ Behaviour

1. Post Purchase, Customer/Consumer Satisfaction and Commitment/ Behaviour Week 4 - 3

2. Basic Framework Motivation Perception Search Evaluation Choice Learning

5. Who are your customers? • External • Direct - Primary • End -user • Suppliers • Internal • Other parts of the organisation no under your control

6. Your People • Capability • all your people, whether in the front line or not, are recruited and trained against a customer service competency blueprint NVQ • Continuity • You have retention, reward and recognition strategies which encourage people to remain • Courtesy • Your people are polite, considerate, tolerant and friendly when dealing with customers • Creativity • Your people produce ideas for service innovations and improvements

7. Your Strategy • Commitment • Customer service is a key corporate scorecard indicator: transformational and incremental goals, action programmes and top level accountabilities • Credibility • Your customers have grounds for believing your promises • Classification • You segment your customers, periodically review your segmentation profiles and vary your product / service offer across segment boundaries • Concentration • You focus your marketing efforts on your most profitable customers

8. Your Customers • Consistency • Your customers always know what to expect from you • Communication • Your customers understand what you say to them; equally you actively promote opportunities for two-way dialogue • Comfort • Your customers feel comfortable with everything which collectively comprises your company’s reputational asset • Contact • You offer customers service at times to suit your customers, not merely at times which suit you.

9. The Service / Profit CycleREF The Loyalty Effect (Reichheld)

10. The 4 Cs approach • Kotler proposition based on the consumer point of view of the 4 Ps • Customer Value • Convenience • Cost • Communication

11. Who/what is the ideal customer? • Knows the rules • Wants a mutually beneficial relationship • Communicates • Complains - • Constructively • Feedback • The class from hell

12. Why should you want to manage the customer interface? • If you don’t someone else will • WATCHDOG • Marketing sensibly eg -

13. Motivational Issues • Mystery Shopper = snooping on staff? • Transparent • Realistic expectations? • Agreed level of performance • Remedial training • Reward good exceptional performance -feedback cards

14. Who/what is the ideal customer? • Knows the rules • Wants a mutually beneficial relationship • Communicates • Complains - • Constructively • Feedback • The class from hell

15. Why should you want to manage the customer interface? • If you don’t someone else will • WATCHDOG • Marketing sensibly eg -

16. Motivational Issues • Mystery Shopper = snooping on staff? • Transparent • Realistic expectations? • Agreed level of performance • Remedial training • Reward good exceptional performance -feedback cards

17. CRM - Relationship Marketing • Strategic Issues in managing customers • The 6 Markets

18. Strategic Issues in RM • McKinsey & Co Framework • The Seven S’s • Strategy • Structure • Systems • Shared Values • Skills/Staff • Style • More applicable in a matrix organisation

19. Strategy is the key • What is (a) strategy? • Integrated plan for development of marketing orientation SYSTEMS/STRUCTURE • Formalised definitions of markets and mission -SHARED VISION/STYLE • Detailed specification of marketing objectives • Commitment to implementation SKILLS/STAFFING

20. Strategy is a coherent set of actions aimed at gaining a sustainable advantage over the competition..

21. Shared values • The ideas of what is right and desirable - the mores of the organisation / individuals • Typified by catch phrases / sound bites • “We will become a fully customer driven organisation • Customers come first • Marketing expenditures are an investment • Service is paramount” • ??

22. Style • The way that management behaves... • Top management support - visible commitment to customer related activities • Open communications between all functional groups and marketing staff • Recognition/reward of customer /market oriented behaviour

23. Structure • Clearly defined responsibilities and reporting lines • Key accounts - recognising important customers • Decentralised marketing staff to provide close and fast support to customers • Staff rotation of non-marketing staff through customer contact positions

24. Systems • Procedures and processes • Information - flow • Customer intelligence • Competitor intelligence • Marketing planning and control systems • Providing information to customer facing staff • Process easy for both customers and staff.

25. Skills/Staffing • People in the organisational rather than personal context • Recruitment of people with requisite skills / ability to acquire • Provision of adequate number of customer service staff • Marketing training -programmes and market • Analytical skills in segmentation

26. The Six Markets • Consumer Market is central • Supplier markets • Referral markets • Internal Markets • Influence Markets • Employee (recruitment) markets

27. Customer Markets - direct. • Referral markets - parties not having a direct/any relationship with the organisation often established by repute - SSG - issue is a need to track and exploit. • Suppliers markets - issue is to extract the best from the relationship often over and above price - Co-makership

28. Employee markets courting potential employees - particularly relevant in times of skill shortage Tesco - Nokia/Ericsson • Influence markets - concentrates on those stakeholders who can have an impact on the way the organisation conducts itself.Government • Internal markets - Everyone’s a customer = individual markets and the need to unite staff in line with the aims = mission, strategy and goals of the organisation.

29. Richer SoundsHow to make money from old fashioned sales Five basic principles • Work should be fun • People should get recognition • Service rather than sales should be rewarded • Inform people and listen to ideas • You must show people loyalty

30. The need for customer obsession Customers are:- The most important people in any business Not dependent on us - we depend on them Not an interruption to our work - they are the purpose of it Not doing us a favour Part of the business Not a cold figure on a sales report Not someone to fight People who have wants -we have satisfaction for them Deserve respect The life blood of the business

31. High level service providers have/ enjoy • High staff • Low staff • Purchase levels = • Customer retention levels = • Promotional costs = • so cost of sales = • Number of referrals and recommendations = • Prices = • so profit levels =

32. The customer focused company has two layers! • LAYER 1 People who directly serve customers • LAYER 2 People who serve people in layer 1

33. Lifetime customer value and loyalty • How can it be calculated? • Specifically in your business field • Think of some consumer markets and calculate a value! • Do the same for business to business

34. This thing called loyalty Incentive loyalty Inertia loyalty Lazy - Habitual loyalty Monopoly loyalty Price loyalty Trend loyalty True - lifetime loyalty

35. The Loyalty EquationJan Hofmeyr • Affinity • Satisfaction • Involvement

36. Satisfaction • What is it

37. Involvement • Is “a reflection of how much the customer has invested* in the relationship and how difficult it would be to sever links” *financially or emotionally This means treating the customers as….?

38. Affinity • How the customers feel emotionally about the brand and the would-be alternatives. • This can only be determined after establishing satisfaction and involvement levels… • Hewlett-Packard, • Tesco • Co-op Travelcare.

39. Customer Loyalty • What is it? • Willingness to keep on doing business with you no matter what. • Share of spending - not market share • The extent to which they will recommend you.

40. What happens when things go wrong - inevitably Empathy + restoration • Dealing with demanding customers* - SARAH at the sharp end.. • Stop talking • Adopt active listening • Reflect content or feeling • Act with empathy - Your own mother! • Handle the subject matter *David Martin Person first problem second

41. Training aspects Wide breadth of training needs/methods • Job skills - obviously • Cross training - • General business training - • Peer training - • Off the job - • Self -improvement training holistic

42. WOW FACTORS • Instantly recognisable and valued by customer • They are quick and easy to do • They cost little or nothing! • Tissues? Smile?

43. Make sure you’re not rewarding the wrong customers • Buy early and pay top prices - leave it until the last minute and get a great deal! • Small purchasers get dealt with quickly - big spenders can wait in line! • The quicker you become a customer - the worse the deal you will get! • Banks? • If you’re a new customer you can have the latest ????? At a give away price if you’re an existing customer you’ll have to pay a lot more..

44. Consumers and choice • I just have too much choice. 1980s Supermarkets - 4,000 lines now40,000 lines • By the year 2020 we will all be clinically stupid, because of the bewildering choices presented to us and lack of time to really understand .. IDM

45. Bewildering choice • There are - “ thousands of mundane choices [about] these kinds of orange juice and cereal … you lose your life in these things. Your life becomes shallow” • Natan Sharansky

46. What is the current consumer psyche? Pre Third Age • Pensions versus doubting the value of work • Earning money not having a career • Health versus wealth - compensating activities • Gratification - pleasure conflicts • Money rich - time poor - Working Time Directive • The invasion of the mutant spenders • ?????

47. Background to Relationship Marketing DAVIDSON • Cheaper costs of IT = collecting and processing data • More sophisticated and robust databases • Better knowledge of customers • Decline in growth markets - focus of competition • Consumers more demanding

48. Relationship Marketing means • Long term commitment - • NOT JUST FOR CHRISTMAS! • Building a two way relationship • Transparency • Total company commitment • Listening

49. Customer Care - the payback! • Customer service equals quality = success • Good image to underpin expansion • Increased profitability • Happier staff.....

50. Satisfied Customer? Rank Xerox Research found that ... The difference between a satisfied and a very satisfied customer in terms of their willingness to buy again is SIX times