Vous êtes sur la page 1sur 9

2 mark questions 1.

Define Customer loyalty It can be defined as the totality of feelings or attitudes that would incline a customer consider the re-purchase of a particular product, service or brand or re-visit a particular company, shop or website. Customer loyalty has always been critical to business success and profitability. 2. Mention the factors determined by customer loyalty Customer loyalty is determined by three factors: relationship strength, perceived alternatives and
critical episodes

3. Mention the factors that negatively affect customer loyalty


Major factors that negatively affect customer loyalty:

the customer moves out of the service area the customer no longer has a need for the products or service more suitable alternative providers become available poor handling of a critical episode

4. Explain four important types of marketing activities that companies are using to improve loyalty and retention Create superior products, services and experiences for the target market. Get cross-department participation in planning and managing the customer satisfaction and return process. Integrate the voice of customer to capture their stated and unstated needs or requirements in all business decisions. Assess the potential of frequency programs and club marketing programs. Run award programs recognizing outstanding employees.

5. Explain B2B and B2C consumer marketing

It is also important that marketing departments assess as best they can the profitability of each customer or business segment, whether in a business-to-consumer (B2C) or business-to-business (B2B) context. Not all customers are profitable and striving to maintain the loyalty of unprofitable customers or partners is not always commercially viable. Analysing customers relationship costs with revenue can demonstrate this and it is best business practice to terminate those relationships, which are found not to be profitable. 8marks questions 6. Explain how a brand loyalty is created for the customers ?

Creating a strong, tight connection to customers is the dream of any marketer and often the key to long-term marketing success. Companies that want to form strong customer bonds need to attend to a number of different considerations.

Forming Strong Customer Bonds 1) Create superior products, services, and experiences for the target market. 2) Get cross-departmental participation in planning and managing the customer satisfaction and retention process. 3) Integrate the "Voice of the Customer" to capture their stated and unstated needs or requirements in ali business decisions. 4) Organize and make accessible a database of in formation on individual customer needs, preferences, contacts, purchase frequency, and satisfaction. 5) Make it easy for customers to reach appropriate company personnel and express their needs, perceptions, and complaints. 6) Assess the potential of frequency programs and club marketing programs. 7) Run award programs recognizing outstanding employees.. 7. What is increased profitability associated with customer loyalty The increased profitability associated with customer loyalty occurs because: acquisition costs only occur at the beginning of a relationship, so the longer the relationship, the lower the amortised cost

account maintenance costs decline as a percentage of total costs (or as a percentage of revenue) long-term customers tend to be less inclined to switch, and also tend to be less price sensitive long-term customers may introduce new customers via word of mouth long-term customers are more likely to purchase add-ons satisfaction breeds habit, meaning that long-term customers are less likely to switch to competitors, making it less likely for competitors to enter the market or gain market share

long-term customers are less expensive to service because they are familiar with the process and require less active familiarisation loyal customers are more consistent in their buying behaviour high levels of repeat customers makes employees jobs easier, which feeds back into improved customer service.

8. Mention the ways of building customer loyalty Here are ten ways to build customer loyalty: Communicate. Whether it is an email newsletter, monthly flier, a reminder card for a tune up, or a holiday greeting card, reach out to your steady customers. Customer Service. Go the extra distance and meet customer needs. Train the staff to do the same. Customers remember being treated well. Employee Loyalty. Loyalty works from the top down. If you are loyal to your employees, they will feel positively about their jobs and pass that loyalty along to your customers. Employee Training. Train employees in the manner that you want them to interact with customers. Empower employees to make decisions that benefit the customer. Customer Incentives. Give customers a reason to return to your business. For instance, because children outgrow shoes quickly, the owner of a childrens shoe store might offer a card that makes the tenth pair of shoes half price. Likewise, a dentist may give a free cleaning to anyone who has seen him regularly for five years.

Product Awareness. Know what your steady patrons purchase and keep these items in stock. Add other products and/or services that accompany or compliment the products that your regular customers buy regularly. And make sure that your staff understands everything they can about your products.

Reliability. If you say a purchase will arrive on Wednesday, deliver it on Wednesday. Be reliable. If something goes wrong, let customers know immediately and compensate them for their inconvenience.

Be Flexible. Try to solve customer problems or complaints to the best of your ability. Excuses such as "That's our policy" will lose more customers then setting the store on fire. Read our 60-Second Guide to Managing Upset Customers for more information.

People over Technology. The harder it is for a customer to speak to a human being when he or she has a problem, the less likely it is that you will see that customer again.

Know Their Names. Remember the theme song to the television showCheers? Get to know the names of regular customers or at least recognize their faces.

9. Explain the Customer Relationship Management and Customer Loyalty While many objective measures of customer loyalty exist (e.g., defection rate, number of referrals), customer surveys remain a frequently used way to assess customer loyalty. There are a few reasons for the popularity of customer survey use in customer experience management. First, customer surveys allow companies to quickly and easily gauge levels of customer loyalty. Companies may not have easy access to objective customer loyalty data or may simply not even gather such data. Second, results from customer surveys can be more easily used to change organizational business process. Customer surveys commonly include questions about customer loyalty as well as the customer experience (e.g., product, service, support). Used jointly, both business attribute items and loyalty indices can be used (e.g., driver analysis, segmentation analysis) to identify reasons why customers are loyal or disloyal. Finally, objective measures of customer loyalty provide a backwards look into customer loyalty levels (e.g., defection rates,

repurchase rates). Customer surveys, however, allow companies to examine customer loyalty in real-time. Surveys ask about expected levels of loyalty-related behavior and lets companies look into the future regarding customer loyalty.

While there has been a change in business nomenclature around the application of customer surveys from "customer relationship management to customer experience management," the analytical techniques used to understand the survey data (e.g., segmentation analysis, driver analysis) remain exactly the same. The ultimate goal of customer loyalty survey analyses, no matter what business nomenclature you use, is to identify the reasons why customers are loyal or disloyal. 10.Explain Customer Loyalty and Financial Performance There are several objective measures of customer loyalty: Number of referrals: Word of mouth/Word of mouse Purchase again Purchase different products Increase purchase size Customer retention/defection rates

Based on the objective measures of customer loyalty, we can see how company financial growth can occur through the increase in customer loyalty. Through the referral process, companies can grow through the acquisition of new customers. The idea is that the customer acquisition process relies on existing customers to promote/recommend the company to their friends, who, in turn, become customers. Another way of strengthening the financial growth of a company is through increased purchasing behavior (e.g., increase amount of purchases, purchase different products/services) of existing customers. Finally, company growth is dependent on its ability to not lose existing customers at a faster rate than they acquire them. For example, customer defection rate is an important metric in the wireless service industry where customer defections are common.

11. What are the techniques of increasing customer loyalty. 1 Interacting with, Customers; Listening to customers is crucial to CRM. Some companies have created an ongoing mechanism that keeps senior managers permanently plugged to front-line customer feedback. 2) Developing Loyalty Programs: Two customers' loyalty programs that companies can offer are frequency programs (FPs) and club marketing programs. FPs are designed to provide rewards to customers who buy frequently and in substantial amounts, They can help to build long-term loyalty with high CLV customers, creating cross-selling opportunities in the process. Many companies have created club membership programs. Club membership programs can be open to everyone who purchases a product or service, or it can be limited to an.affinity group or to those willing to pay a small fee. Although open clubs are good for building a database or snagging customers from competitors' limited membership clubs are more powerful long-term loyalty builders. Fees and membership conditions prevent those with only a fleeting interest in a company's products from joining. These clubs attracts and keep those customers who are responsible for the largest portion of business, 3) Personalizing Marketing: Company personnel can create strong bonds with customers by individualizing and personalizing relationships. An increasingly essential ingredient for the best relationship marketing today is the right technology. E-commerce companies looking to attract and retain customers are discovering that personalization goes beyond creating customized information. 4) Creating Institutional Ties: The Company may supply customers with special equipment or computer link! that help customers to manage orders, payroll, and inventory. Customers

are less inclined to switch to anothe supplier when this would involve high capital costs, high search costs, or the loss of loyal-customer discounts.

12 mark 12. Explain customer based business model with a diagram Creating loyal customers is at the heart of every business. Consumers are more educated and informed than ever, and they have the tools to verify companies' claims and seek-out superior alternatives. Customer relationships are built on the basis of trust. Invariably, it has been observed that repeat business gets generated only when customers believe their suppliers and perceive them as creating more value. Hence, loyalty is created only when customers perceive fairness, equity, and transparency in his/her relationship with the seller. It is in the interest of the seller to convert more number of customers into loyal customers because loyal customers are the biggest engines of growth. They generate profits, help the firm to retain its high-performing employees, and investors who continue to invest in it. The loyalty based business model shown in figure 3.10 clearly indicates a relationship between customer loyalty, employee motivation, and investor confidence.

Fig 3.10 Loyalty Based Business Model

As one can see from the above business model, the economic impact of loyalty on a firm is manifold. Some of these are summarized below: 1) When a firm has been able to understand customer value and values, and has integrated it with the marketing mix, the firm is able to create and deliver a superior value to its target market. This market values this offer, and hence is willing to pay more. Since, they are satisfied and feel delighted, they share their experience with their peers, and thereby add new customers to the firm's portfolio. 2) This perceived superior value by the customer fuels growth in the organization. This growth is reflected by increase in sales, profits, ROI, number of products, and in the overall size of operations. 3) Superior perceived value also creates repeat business. Customers are more loyal to these firms than to others. Loyal customers also further spur the growth engine. 4) Growth and loyal customers help firms to target and retain the right employees. It must be noted that a motivated and loyal employee is a key resource in the value creation process and, in turn, customer loyalty. This is an important lesson that many new generation Indian firms have to learn.

References
Fornell, C., Mithas, S., Morgensen, F. V., Krishan, M. S. (2006). Customer satisfaction and stock prices: High returns, low risk. Journal of Marketing, 70 (January), 1-14. Reichheld, F. F. (2006). The ultimate question: driving good profits and true growth. Harvard Business School Press. Boston.

Loyalty status : Hard core loyals: consumers who buy one brand all the time Split loyals consumers who are loyal to two or three brands

Shifting loyals consumers who shift loyalty from one brand to another Switches consumers who show no loyalty to any brand

Vous aimerez peut-être aussi