Chapter-5 First Lecture (26.07.2020) Relationship Development Model-Very Important - Last Slide

Chapter-5 First Lecture (26.07.
2020)
*Relationship development model- very important- last slide
How customer loyalty will be achieved by delivering value satisfaction? Long term
Loyalty relationship. Satisfaction- when a product matches the customer
expectation. Loyal customer- When customer repurchase, we perceived them as
loyal customer. But it’s not the case always generally, loyal customers are those
who doesn’t usually change their brands. The profit of the business comes from
20% of the loyal customers. You have to give special treatment to them and try to
convert the 80% of the customers to loyal. The purpose of the business is to
create customer. Beside creating customers, we have to retain customers and
without its business can’t make profit. Bucket theory telling us that most of the
customers become profitable from the second year, so if can’t retain customers
from the second year or switch from the second year then you have to generate
new customers and then it will take almost 1 hour to make him profitable. So, if
this happens regular generating new customer and leaving, then you can’t get
profitable any profitable customers. So beside creating customers you have to
retain customers to make profit from the second year. You need to create
profitable relationship with to survive in the market. First year you have to do lots
of expense on customer to create relationship with customers.
Customer relationship management simply can be said that seeking customer

retention by using variety of after marketing tactics. Here focus is mainly given on
after marketing tactics (after sales services- to create strong bondage with the
customer). In after sale service whatever service you give to customer, you can’t
keep customer if you can’t maintain quality in the value chain (unbound logistic to
after sales service- chapter 2) we can’t retain customer. Value chain takes us to
holistic marketing. There are four points in holistic marketing- I) performance
(both financial and non-financial performance such as loyalty, goodwill, positive
mouth). In this chapter relationship marketing is relationship with customer. But
holistic marketing tells us that this relationship is with customer as well as with
employees, partner, suppliers.
Customer Retention: if you reduce 5% of the customer defection rate then you
can increase profit by 25% to 85%.
Chapter-5 Second Lecture (29.07.2020)
Steps in customer value analysis:
1. Identify major attributes and benefits that customers value. From attribute
we get the benefit and from that the value is entering. What are the major
attributes and benefits that the customer will give value or feel
importance? The attributes and benefits which customers give emphasis we
have to bring that. Focus on specific things rather than focusing on all the
things.
2. Assess the qualitative importance of different attributes and benefits. You
have to find out lots of benefits and attributes and to assess this. For
example- you have surveyed 1000 people and found that 900 people want
touch screen mobile and 500 people said there is no problem with the
keypad in mobile, now what will you do? Here are two segment and both of
the segment are substantial. You have found out that the touch pad
customer are profitable and affluent customers and the key pad customers
are lower class people. You have to analyze your capability of serving your
segmented customers. You have to see which segment you can serve
effectively and choose that segment. Rating of attributes and benefits is
actually diversifying to much then you should cluster them into different
segments.
3. Assess the company’s and competitor’s performances on the different
customer vales against rated importance. You wont see only your
performance you have to see the performance of your competitors. Either
you have to match with them or better than them.
4. Examine ratings of specific segments. How the segment is profitable,
substantial, affluent. You have to see the segment to have selected
whether you can reach to that or not.
5. Monitor customer value over time. Over time customer value might
change, shift if we don’t monitor this customer wont buy anymore because
they got a better product. So if you don’t see the changes in customer
solution, want, preference, technology, environment and decrease the
price (if price decrease demand increases) then nothing will change. But if
the value of customers changes overtime then this wont work, then
monitor customer value and deliver the value according to its changes.
Measuring satisfaction:
Sense of fulfillment - Whenever the performance of the product and my

expectation is actually matching then we can perceive that the customer is
satisfied.
 Periodic survey
 Customer loss rate
 Mystery shoppers
Customer relationship management: it is the process of carefully managing

detailed information about individual customers and all customer touch points to
maximize customer loyalty. Why did you get detailed information about individual
customers? Because you want to provide customize solution to the customers.
After getting information of the customers you have to maximize the satisfaction
at every touch point then the customer will become loyal.
CRM strategies:
 Reduce the rate of defection:

 Increase longevity: Customer life time value.
 Enhance “Share of wallet”: customer wallet means customer spends much
on your product.
 Terminate low profit customers:
 Focus more effort on high profit customers: more effort should be given on
high profit customers because most of the profit comes for 20% of the
customer.
Customer service is free. But why Grameenphone, Robi charges for customer
service? They charges for as user of this sims are high then it becomes difficult for
them to manage that’s they charges for demarketing for not calling. It becomes
difficult for them to manage all the customers that’s why they charges for serving
customers. There are some problem customer, jay customer, customer from the
hell. You have to terminate this customers by increasing cost, service charge.

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Chapter-5 First Lecture (26.07.

*Relationship development model- very important- last slide

Customer relationship management simply can be said that seeking customer

Steps in customer value analysis:

Sense of fulfillment - Whenever the performance of the product and my

Customer relationship management: it is the process of carefully managing

 Reduce the rate of defection:

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