Principles of Marketing for Grade 12 Students. Chapter 2

CHAPTER 2CUSTOMER RELATIONSHIP: CUSTOMER SERVICE

Lesson 1:Relationship Marketing

I am Johemie Quinones

RELATIONSHIP MARKETING

According to Serrano, Relationship Marketing includes activitiesaimed at developing and managing trusting and long-termrelationships with larger customers. (Customer profile, buyingpatterns and history of contacts are kept in a sales database)

Relationship marketing is a strategy designed for customer loyalty,interaction, and long-term engagement to be fostered. CustomerRelationship focuses more on long-term customer retention thanacquiring large numbers of new and potentially single-transactioncustomers.

Characteristics of Relationship Marketing:

1. It focuses on the long-term rather than the short-term.2. It focuses on partners and customers rather than on the company’s products.3. It puts more emphasis on customer retention and growth than on

customer acquisition.4. It relies on cross-functional teams rather than on departmental-level work.5. It relies more on listening and learning than on talking.

Relationship Marketing is designed to develop strong connections with customers by providing them with information directly suited to their needs and interests by promoting open communication.

Relationship marketing calls for new practices within the 4p’s.

THIS IS A SLIDE title

▹Here you have a list of items▹And some text▹But remember not to overload your slides with

content

Your audience will listen to you or read the content, but won’t do both.

▹More products are customized to the customers’ preferences.▹New products are developed and designed cooperatively with suppliers and distributors.

▹The company will set a price based on the relationship with the customer and the bundle of features and services ordered by the customer.▹In business-to-business marketing, there is more negotiation because products are often designed for each customer.

PRICE

▹RM favors more direct marketing to the customer, thus reducing the role of middlemen.▹RM favors offering alternatives to customers to choose the way they want to order, pay for, receive, install, and even repair the product.

PLACE

▹RM favors more individual communication and dialogue with customers.▹RM favors more integrated marketing communications to deliver the same promise and image to the customer.▹RM sets up extranets with large customers to facilitate information exchange, joint planning, ordering, and payments

PROMOTION

In the business world, retaining customers has a lesser cost at least eight times compared to acquiring new ones. Thus, this marketing capitalizes on the same fact and is beneficial to the company in several ways. .

BENEFITS OF RELATIONSHIP MARKETING


1. Understanding customer characteristics

the company can segregate its customers into groups based on their characteristics like purchasing power, frequency and volume of sale transactions. It also helps the company get valuable feedback from its customers and understand their needs and expectations.

2. Delivery and meeting expectations

if the company knows what its customers’ needs are, it will help reduce wastage due to trial and

error methods. It is easier to create a product if the features

and specifications of the product are known.


3. Repeat Business

Sellers should maintain good attitude to the buyers. By doing this, buyers will feel that they do not need to switch sellers.

4. Prevents negative transition

trust and loyalty go hand in hand and it is super beneficial for all business. It will help prevent customers from turning to competitors.

5. Word-of-mouth marketing

a happy customer will always promote business by telling ten other people about the amazing services or performance received from a company.


6. Increasing customer base

satisfied existing customer is 100% more likely to recommend a

product/service to a prospective customer. Apart from customer, referrals, there are several other

ways to increase customer satisfaction by employing methods

of utilizing social networking websites, blogs, informal surveys, benefits on loyalty cards, timely

response to complaints and requests as a constant reminder of its presence around and retention equity is improved by enhancing

customer satisfaction.

7. Reduced marketing cost

Benefits also include lesser marketing costs and more value

creation. This can be explained by stating the following statistics: every 5% increase in customer

retention can increase a company’s annual profits from at

least 25% to as much as 125%, while simultaneously leading to a

reduction of 10% in marketing costs. An existing customer will

spend 33% more than a new customer to buy a company’s

product/service.


8. Minimization of customer price

sensitivity

a happy customer will be willing to pay more for a

product if there is a guaranteed

satisfaction of products and after

sales services attached to the

price. .

9. Identification with the company

the benefits are reaped both by the company and

the customers. It helps customers identify more

with the company. Keeping your communication lines open and keeping in touch with the customers makes

them feel like they are being valued. It will keep customers coming in and build brand equity for the company in the long run.

10. Product Market Expansion

the company’s employees must be

ready to deliver beyond the company’s

boundaries on customer demand.

▹Examples of companies using relationship marketing▹Ikea▹Direct recruitment▹American airlines▹Dell▹Vyvanse


Lesson 2:Customer Value

CUSTOMER VALUE

Customer Value is the relationship

between benefits and the costs including money,

stress, and time to sacrifice that is necessary to

get those benefits.

Or simply stated in a mathematical equation:

Benefits – Cost = Customer Value

CUSTOMER VALUE

In essence, customer value entails extraordinary delivery of four value-points or components known also as SQIP:

SERVICE the intangible value offered to customers.


QUALITY customer’s perception of how well a company’s products and services meet expectations


IMAGE customers’ perception of the company or business they interact with


PRICE the price a company can command for its products and services that its customers are able and willing to pay.

1. Provide consumer with the best cost.

2. Provide the consumer with the best product.

3. Provide the consumer with the best service.

Three ways a company can

establish customer

value to its customer

base:

DELIVERING CUSTOMER

VALUE

Importance of Customer Value

1. Designing and providing superior customer value are the keys to successful business strategy in the 21st century.

2. Value reigns supreme in today’s marketplace and market-space.

3. Customers will not pay more than a product is worth and will reward excellence.

4. A customer-centric culture provides focus and direction for the organization, ensuring that exceptional value will be offered to customers.

5. Designing and delivering superior customer value propels organizations to market leadership positions in today’s highly competitive global markets – absolute advantage

6. Providing outstanding customer value has become a mandate for management.

Importance of Customer Value

7. In choice-filled arenas, the balance of power has shifted from companies to value-seeking customers.

8. Managing customer value is even more critical to organizations in the new service and information-based economy

9. Firms not providing adequate value to customers will struggle or disappear –customer value is a key ingredient in building competitive advantage.

10. Today’s customers are quite smart and sophisticated and are looking for companies that::

a. Create maximum value for them based on their needs and wants, andb. Demonstrate that they value their business.

thanks!CREATING MORE CUSTOMER VALUE?

▹Understand what drives value for customers▹Understand value proposition▹Identify the customers and segments where the company can create more value relative to competitors▹Create a win-win price▹Focus investments on the most valuable customers


Lesson 3:Customer Relationship Development Strategies

Benefits of Developing Customer Relationship

Customer Relationship is a marketing

approach that focuses on creating an

ongoing and long-term relationship with

customers.

Benefits in developing and implementing customer relationship

1. Consistent customer experience

Customer Lifecycle Journey


2.Customer feedback


3.Customer Profitability


4.Customer advocate


5. Innovation


5. Innovation 4. Customer advocate3. Customer Profitability2. Customer Feedback1. Consistent customer experience

1. Make every customer interaction count

Strategies in Developing Customer Relationship


2. Follow-through on commitments and claims about products or services.


3. Develop Employees.

4. Offer benefits and product value that responds to the customer’s desires.


5. Treat customers as individual who are respected and valued.


6. Listen to customer.


7. Build a strong brand identity.


8. Surround customers with valuable information by using emails, websites, content, social media, and other methods of outreach but do not be invasive.


9. The business must have a website.


10. Reward loyal customers.


11. Nothing strengthens a bond more that appreciation.


12. Create a blog about the business where discuss is more casual and inviting.



5. Treat customers as individual who are respected and valued.

4. Offer benefits and product value that responds to the customer’s desires.

3. Develop Employees.

2. Follow-through on commitments and claims about products or services.

1. Make every customer interaction count

6. Listen to customer.


9. The business must have a website. 10. Reward loyal customers. 11. Nothing strengthens a bond more that appreciation. 12. Create a blog about the business where discuss is more casual and inviting.

8. Surround customers with valuable information by using emails, websites, content, social media, and other methods of outreach but do not be invasive.

7. Build a strong brand identity.


Lesson 4: Customer Service Strategy in the Philippine Business Enterprise

Customer Service Strategy

Customer Service Strategy

CUSTOMER SERVICE is the act of taking care of the customer’s needs by providing and delivering professional, helpful, high quality service and assistance before, during, and after the customer’s requirements are met.

Elements of the Customer Service strategy:

1. A vision for customer service


2. Assessing customer needs


3. Hiring for Service


4. Organizational goals for customer service


5. Customer Service Training


6. Employee Accountability


7. Rewarding Good Service

THE SUKI SYSTEM IN THE PHILIPPINES


SUKI SYSTEM system of patronage in which a customer regularly buys their merchandise from a certain client.

THE SUKI SYSTEM IN THE PHILIPPINES


SUKI – a partner system of doing business in the Philippines, wherein a customer buys certain products from a particular vendor, who in turn offers discounts and other perks for such exclusivity. Filipinos use the word suki to refer to both buyers and sellers, indicating their equal roles and obligations in an eponymous relationship.

Thanks!