Creating Customer Value,

Satisfaction,
and Loyalty
Marketing Management, 13
th
ed
5
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-2
Chapter Questions
What are customer value, satisfaction, and
loyalty, and how can companies deliver them?
What is the lifetime value of customers?
How can companies cultivate strong customer
relationships?
How can companies both attract and retain
customers?
What is database marketing?
Keep it in your mind- 4 rules
Creating loyal customer is the heart of
every business
Business success by getting, keeping,
and growing customer
Customer is the only reason for your
business
Without customer you dont have
business
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-3
Traditional chart VS Modern Cust.
Orientation Chart
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-4
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-5
What is Customer Perceived Value?
Customer perceived value is the
difference between the prospective
customers evaluation of all the benefits
and all the costs of an offering and the
perceived alternatives.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-6
Figure 5.2 Determinants of
Customer Perceived Value
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-7
Steps in a Customer Value Analysis
Identify major attributes and benefits
that customers value
Assess the qualitative importance of
different attributes and benefits
Assess the companys and competitors
performances on the different customer
values against rated importance
Examine ratings of specific segments
Monitor customer values over time
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-8
Delivering high customer value-
What is Loyalty?
Loyalty is a deeply held commitment to re-
buy or re-patronize a preferred product or
service in the future despite situational
influences and marketing efforts having the
potential to cause switching behavior.
Value proposition whole benefit that
company promises deliver to customer (more
than the core positioning)
Value Delivery System all the experience
customer have when using the offering.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-9
Top Brands in Customer Loyalty
Apple
Clairo (hair color)
Samsung
Clinique
Avis
Wallmart
Google
Amazon
Bing
At&t
Intercontinental
Hotel
Cheerios
Dunkin Donut
Home Depot
Dominos Pizza
Total Customer Satisfaction
Satisfaction is a person feelings of
pleasure or disappointment that result
from comparing a product perceived
performance (or outcome) to
expectation
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-10
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-11
Monitoring Satisfaction
Measurement technique
Periodic surveys
can tract customer satisfaction directly & ask
additional question to measure repurchase intention
,cust.Likelihood, willingness to recommended the
company and brand
(to monitor competitor performances) Customer loss
rate
Measure who stop buying, switch to another brand or
supplier
Influences of customer satisfaction 2009 ACSI
scores by industry (penilaian industri-rangking produk di
industri)
Customer Complaint 24 hour complaint call centre
Example for Influence of Customer Satisfaction
(could affect cust. Loyalty and tendency to buying the brand)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-12
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-13
Product and Service Quality
Quality is the totality of features and
characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.
Impact of Quality
Product Service quality cust.
Satisfaction company profitability
(tightly related)
Quality clearly the key to value
creation and customer satisfaction
Total quality is every body
responsibility in organization
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-14
Example of Impact of quality
British Airways
The best airlines from
1989-1996
Applied business
efficiency; sold ground
feet services, no in
flight catering
Loss the title
Revitalize
2009 Best airlines
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-15
Maximizing Customer Lifetime Value
Customer profitability
Customer Profitability
analysis
Customer Lifetime
value
Describes the net
present value of the
stream of future profits
expected over customer
lifetime purchases.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-16
Cultivating Customer Relationship
Customer Relation Management
Personalize marketing
Customer empowerment
Customer review and recommendation
Attracting and Retaining Customers
Reducing Defection
Retention Dynamic
Managing Customer base
Building Loyalty
Interacting with customer
Developing loyalty program
Creating Institutional ties
Win-Back
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-17
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-18
What is Customer Relationship
Management?

CRM is the process of carefully
managing detailed information about
individual customers and all customer
touchpoints to maximize
customer loyalty
(personalizing marketing)
Example Personalized Marketing
Dominos
build your
own pizza
program

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-19
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-20
Framework for CRM
Identify prospects and customers
Differentiate customers by needs and
value to company
Interact to improve knowledge
Customize for each customer
Customer Empowerment
(Marketers are help customer become evangelist of
their brand by providing them the resources)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-21
Customer Review and
Recommendation
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-22
Attracting & Retaining Customer
Reducing Defection (mengurangi switcher-berkurangnya
customer), to avoid it, company should:
Define customer using time of the product
Find the customer dislike factor
Compare cost factor
Retention Dynamic (dinamika pertahanan) maintaining
customer preferences (ex;Below the line mktg)
Managing Customer base
Reduce the rate of defection
Increase longevity
Enhance share of wallet
Terminate low-profit customers
Focus more effort on high-profit customers

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-23
Building Loyalty
Interacting with Customer
Developing Loyalty
program
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-24
Customer Database and Database
Marketing
Customer Database
Data Warehouse
and data Mining

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-25
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-26
Database Key Concepts
Customer
database
Database
marketing
Mailing list

Business
database
Data warehouse
Data mining

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-27
Using the Database
To identify prospects
To target offers
To deepen loyalty
To reactivate customers
To avoid mistakes
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-28
Dont Build a Database When
The product is a once-in-a-lifetime
purchase
Customers do not show loyalty
The unit sale is very small
The cost of gathering information is too
high