Issues 2 Customer Relationships & Superior Service

Definition
Identify what the customer really values in the goods on offer, in the mix used to communicate and distribute the offer and the additional services provided Important as its more costly to find new cust than to retain and only way to retain is providing superior service Many markets maturing = fewer new cust Competition is intense

Two Concepts
Customer Retention: measure of repeat purchase bahviour and may or may not be related to customer satisfaction Customer Loyalty: how cust feel abt a coy- trust, actively seek to do biz, recommend to friends related to cust satisfaction

Relationship Marketing
Attracting, maintaining and enhancing lasting customer relationship at a profit achieved by a mutual exchange and fulfilment of promises.
Transaction Single sale orientation Product features Short-term time scale Low emphasis on cust services Limited commitmen Moderate contact Quality- production concern Relationship Customer retention Product benefits Long-term time scale High emphasis on customer services High commitment High contact Quality- everyones concern

Building Relationships with Customers

Building enhanced benefits of loyalty o Financial benefits (discounts rewards for loyalty) o Social benefits (support grp weight watchers) Creating Structural ties and Bonds o Legal agreements Creating Delighted customers o Go beyond expectations and deliver even greater value to customers

Three s of Customer Services

1. Strategy: clear cust service strategy that is communicated throughout org 2. Systems: enable staff to deliver superior service to customers (com system, queuing)

3. Staff: Recruitment, training and empowering employees to provide level of service that will delight customers

Linkage between Cust Relationship/service and CA theories

Porters 5 Forces
Decrease threat of new entrants (new entrant have additional costs to match) Decrease buyer bargaining power o cust satisfaction and commitment tend to decrease price sensitivity and increase switching cost Decrease threat of substitutes o Switching cost includes the risk of inferior service Decrease supplier power o Suppliers will find org more attractive to do biz with Decrease intensity of Rivalry (same reason as substitute)

Generic Strategies
Differentiation- Broad and Focus o Provide unique value cust satisfaction and loyalty is enhanced Cost leader o Superior cust service adds to cost base not strategy cost leader use

Value Chain
Marketing sales- decrease transactions risk, increase satisfaction, target cust Service- Increase service quality and delight cust, needs a coy wide approach HRM- recruitment, training and empowering employees autonomy Infrastructure- systems in place to enable staff to deliver superior service to customers (com systems, timely info)

Kanter
Core Competence- skills of developing, maintain and enhancing cust relationships Time compression- able to anticipate markets trends quicker, staff empowered to respond quickly, customers able to make decision abt products/services quicker Continuous improvement- through frequent measurement, able to identify and then close any gaps that may open Relationships- service alliances (airlines) and stakeholder alliances (financiers/investors- road chows)

Day and Wensley & Generic Strategy

Cust service = superior skill, provide cust additional value = cust satisfaction, loyalty, profit

Org Differentiate via their cust service- hard /different to achieve this type of CA.