CUSTOMER RELATIONSHIP: CUSTOMER SERVICE

The first three steps in the marketing process – understanding the marketplace and
customer needs, designing a customer-driven marketing strategy, and constructing a marketing
program – all lead up to the fourth and most important step: building profitable customer
relationships.

RELATIONSHIP MARKETING
Relationship marketing is a strategy designed to foster customer loyalty, interaction
and long-term engagement. It is aimed to develop strong connections with customers by
providing them with information directly suited to their needs and interests and by promoting
open communication.

Relationship Marketing Concept

“Relationship marketing is a facet of customer relationship management (CRM) that
focuses on customer loyalty and long-term customer engagement rather than short-term goals
like customer acquisition and individual sales.”

Customer Relationship Management

Customer relationship management is perhaps the most important concept of modern
marketing. Some marketers define it narrowly as customer data management activity (a
practice called CRM). By this definition, it involves managing detailed information about
individual customers and carefully managing customer “touchpoints” to maximize customer
loyalty.
Most marketers, however give the concept of customer relationship management a
broader meaning. In this broader sense, customer relationship management is the overall
process of building and maintaining profitable customer relationships by delivering superior
customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing
customers.

RELATIONSHIP BUILDING BLOCKS: CUSTOMER VALUE AND

SATISFACTION
The key to building lasting customer relationships is to create superior customer value
and satisfaction. Satisfied customers are more likely to be loyal customers and give the
company a larger share of their business.

Customer Value. Attracting and retaining customers can be a difficult task. Customers often
face a bewildering array of products and services from which to choose. A customer buys from
the firm that offers the highest customer-perceived value—the customer’s evaluation of the
difference between all the benefits and all the costs of a market offering relative to those of
competing offers. Importantly, customers often do not judge values and costs “accurately” or
“objectively.” They act on perceived value.
 To some customers, value might mean sensible
products at affordable prices, especially in the aftermath
of recent recession. To other consumers, however, value
might mean paying more to get more. For Example, a
Steinway piano – any Steinway piano – costs a lot. But to
those who own one, a Steinway is a great value:
A Steinway grand piano typically runs anywhere from
$61,000 to as high as several hundred thousand dollars. The
most popular model sells for about $87,000. But ask anyone
who owns a Steinway grand piano, and they’ll tell you that,
when it comes to Steinway, price is nothing; the Steinway
experience is everything. Steinway makes very high-quality
pianos—handcrafting each Steinway from more than 12,000
individual parts requires up to one full year. But, more
importantly, owners get the Steinway mystique. The Steinway
name evokes images of classical concert stages and the celebrities and performers who’ve owned and
played Steinway pianos across more than 160 years. But Steinways aren’t just for world-class pianists
and the wealthy. Ninety-nine percent of all Steinway buyers are amateurs who perform only in their
dens.
So is a Steinway piano worth its premium price compared with less expensive pianos?
To many consumers, the answer is no. But to Steinway customers, whatever a Steinway costs,
it’s a small price to pay for the value of owning one. As one Steinway user puts it, “A pianist
without a Steinway, for me, is the same as a singer without a voice.” Says another, “My
friendship with the Steinway piano is one of the most important and beautiful things in my life.”
Who can put a price on such feelings?

Customer Satisfaction. Customer satisfaction depends on the product’s perceived

performance relative to a buyer’s expectations. If the product’s performance falls short of
expectations, the customer is dissatisfied. If performance matches expectations, the customer
is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted.
Outstanding marketing companies go out of their way to keep important customers
satisfied. Most studies show that higher levels of customer satisfaction lead to greater
customer loyalty, which in turn results in better company performance. Smart companies aim
to delight customers by promising only what they can deliver and then delivering more than
they promise. Delighted customers not only make
repeat purchases but also become willing marketing
partners and “customer evangelists” who spread the
word about their good experiences to others.
For companies interested in delighting
customers, exceptional value and service become
part of the overall company culture. For example,
L.L.Bean – the iconic American outdoor apparel and
equipment retailer – was founded on the principle
that keeping customers satisfied is the key to building
lasting relationships.
Year after year, L.L.Bean lands in the top 10 of
virtually every list of top service companies, including J.D.
Power’s most recent list of “customer service champions.”
The customer-service culture runs deep at L.L.Bean. More
than 100 years ago, Leon Leonwood Bean founded the company on a philosophy of complete customer
satisfaction, expressed in the following guarantee: “I do not consider a sale complete until *the+ goods
are worn out and the customer *is+ still satisfied.” To this day, customers can return any item, no
questions asked, even decades after purchase.
The company’s customer-service philosophy is perhaps best summed up in founder L.L.’s answer
to the question “What is a customer?” His answer still forms the backbone of the company’s values: “A
customer is the most important person ever in this company—in person or by mail. A customer is not
dependent on us, we are dependent on him. A customer is not an interruption of our work, he is the
purpose of it. We are not doing a favor by serving him, he is doing us a favor by giving us the opportunity
to do so. A customer is not someone to argue or match wits with. Nobody ever won an argument with a
customer. A customer is a person who brings us his wants. It is our job to handle them profitably to him
and to ourselves.” Adds former L.L.Bean CEO Leon Gorman: “A lot of people have fancy things to say
about customer service, but it’s just a day-in, day-out, ongoing, never-ending, persevering,
compassionate kind of activity.”

Other companies that have become legendary for customer delight and their service
heroics include Zappos.com, Amazon.com, Chick-fil-A, Nordstrom department stores, and
JetBlue Airways. However, a company doesn’t need to have over-the-top service to create
customer delight. For example, no-frills grocery chain ALDI has highly satisfied customers, even
though they have to bag their own groceries and can’t use credit cards. ALDI’s everyday very
low pricing on good-quality products delights customers and keeps them coming back. Thus,
customer satisfaction comes not just from service heroics but from how well a company
delivers on its basic value proposition and helps customers solve their buying problems. “Most
customers don’t want to be ‘wowed,’” says one marketing consultant. “They *just+ want an
effortless experience.”
However, although a customer-centered firm seeks to deliver high customer satisfaction
relative to competitors, it does not attempt to maximize customer satisfaction. A company can
always increase customer satisfaction by lowering its prices or increasing its services. But this
may result in lower profits. Thus, the purpose of marketing is to generate customer value
profitably. This requires a very delicate balance: The marketer must continue to generate more
customer value and satisfaction but not “give away the house.”

Customer Relationship Levels and Tools

Companies can build customer relationships at many levels, depending on the nature of
the target market. At one extreme, a company with many low-margin customers may seek to
develop basic relationships with them. For example, Nike does not phone or call on all of its
consumers to get to know them personally. Instead, Nike creates relationships through
banding-building advertising, public relations, and its web site (www.Nike.com). At the other
extreme, in markets with few customers. For example, Nike sales representative work closely
with the Sports Authority, Dick’s Sporting Goods, Foot Locker, and other large retailers. In
between these two extremes, other levels of customer relationships and appropriate.
Beyond offering consistently high value and satisfaction, marketer can use specific
marketing tools to develop stronger bonds with customers. For example, many companies offer
frequency marketing programs that reward customers who buy frequently or in large amounts.
Airlines offer frequent-flyer programs, hotels give room upgrades to their frequent guests, and
supermarkets give patronage discounts to “very important customers.” For example, JetBlue
Airways offers its TrueBlue members frequent-flyers points they can use on any seat on any
JetBlue flight with no blackout dates. JetBlue promises its members “More award flights. More
points. More to love.” The airline’s “Be True” marketing campaign even highlights real TrueBlue
dedication to inspiring causes.
Other companies sponsor club marketing programs that offer members special
benefits and create member communities.

THE CHANGING NATURE OF CUSTOMER RELATIONSHIPS

Significant changes are occurring in the ways in which companies are relating to their
customers. Yesterday’s big companies focused on mass marketing to all customers at arm’s
length. Today’s companies are building deeper, more direct, and lasting relationships with more
carefully selected customers. Here are some important trends in the way companies and
customers are relating to one another.

Relating with More Carefully Selected Customers

Few firms today still practice true mass marketing – selling in a standardized way to any
customer who comes along. Today, most marketers realize that they don’t want relationships
with every customer. Instead, they target fewer, more profitable customers. “Not all customers
are worth your marketing efforts,” states one analyst. “Some are more costly to serve than to
lose.” Add another marketing expert “If you can’t say who your customers aren’t, you probably
can’t say who your customers are.”
Many companies now use customer profitability analysis to pass up or weed out losing
customers and target winning ones form pampering. One approach is to pre-emptively sceen
out potentially unprofitable customers. Progressive Insurance does this effectively. It asks
prospective customers a series of screening questions to determine if they are right for the
firm. If they’re not, Progressive will likely tell them. “You might want to go to Allstate.” A
marketing consultant explains: “They’d rather send business to a competitor than take on
unprofitable customers.” Screening out unprofitable customers lets Progressive provide even
better service to potentially more profitable ones.

Relating More Deeply and Interactively

Beyond choosing customer more selectively, companies are now relating with chosen
customers in deeper, more meaningful ways. Rather than relying on one-way, mass-media
messages only, today’s marketers are incorporating new, more interactive approaches that
help build targeted, two-way customer relationships.

Two-way Customer Relationships. New technologies have profoundly changed the ways
in which people relate to one another. New tools for relating include everything from e-mail,
web sited, blogs, cell phones, and video sharing to online communities and social networks,
such as Facebook, Youtube, and Twitter.
This changing communications environment also affects how companies and brands
relate to customers. The new communications approaches let marketers create deeper
customer involvement and a sense of community surrounding a brand – to make the brand a
meaningful part of consumers’ conservations and lives. “Becoming a part of conversation
between consumers is infinitely more powerful than handing down information via traditional
advertising,” says one marketing expert. Say another, “People today want a voice and role in
their brand experiences. They want co-creation.”
However, at the same time that the new technologies create relationship-building
opportunities for marketers, they also create challenges. They give consumers greater power
and control. Today’s consumers have more information about brands than ever before, and
they have a wealth of platforms for airing and sharing their brand views with other consumers.
Thus, the marketing world is now embracing not only customer relationship management, but
also customer-managed relationship.
Greater consumer control means that in building customer relationships, companies can
no longer rely on marketing by intrusion. Instead, marketers must practice marketing by
attraction – creating market offerings and messages that involve consumers rather than
interrupt them. Hence, most marketers now augment their mass-media marketing efforts with
a rich mix of direct marketing approaches that promote brand-consumer interaction.
For examples, many brands are creating dialogues with consumers via their own or
existing online social networks. To supplement their marketing campaigns, companies now
routinely post their latest ads and made-for-the-Web videos on video-sharing sites. They join
social networks. Or they launch their own blogs, online communities, or consumer-generated
review systems, all with the aim engaging customers on a more personal, interactive level.
Take Twitter, for example, organizations ranging from Dell, Dunkin’ Donuts have
created Twitter pages and promotions. They use “tweets” to start conversations with Twitter’s
more than six million registered users, address customer service issues, research customer
reactions, and drive traffic to relevant articles, web sites, contests, videos and other brand
activities.
Similarly, almost every company has something going on Facebook these days.
Starbucks has more than six million Facebook “fans”; Coca-Cola has more than five million.
Networks like Facebook can get consumers involved with and talking about a brand. For
example, Honda’s “Everybody Knows Somebody Who Loves a Honda” Facebook page allows
visitors to upload photos of their cars or link up to owners of their favorite old Hondas
worldwide. It asks people to help prove that “we all really can be connected through Honda
love.” The campaign netted about two million Facebook friends in less than two months, more
than double previous fan levels.
Most marketers are still learning how to use social media effectively. The problem is to
find unobtrusive ways to enter consumers’ social conversations with engaging and relevant
brand messages. Simply posting a humorous video, creating a social network page, or hosting a
blog isn’t enough. Successful social network marketing means making relevant and genuine
contributions to consumer conversations. “Nobody wants to be friends with a brand,” says one
online marketing executive. “Your job (as a brand) is to be part of other friends’ conversation.”

Consumer-Generated Marketing. A growing part of the new customer dialogue is

consumer-generated marketing, by which consumers themselves are playing a bigger role in
shaping their own brand experiences and those of others. This might happen through uninvited
consumer-to-consumer exchanges in blogs, video-sharing sites and other digital forums. But
increasingly, companies are inviting consumers to play a more active role in shaping products
and brand messages.
Some companies ask consumers for new product ideas. For example, Coca-Cola’s
Vitamin water brand recently set up a Facebook app to obtain consumer suggestions for a new
flavor, promising to manufacture and sell the winner (“Vitamin wate was our idea; the next one
will be yours.”) The new flavor – Connect (black cherry-lime with vitamins and a kick of
caffeine) – was a big hit. In the process, Vitamin water doubled its Facebook fan base to more
than one million.
 Other companies ask consumers for new product ideas. For example, Pepsi, Unilever,
and Heinz and many other companies have run contests for consumer-generated commercials
that have been aired on national television.
Consumer-generated marketing, whether invited by marketers or not, has become a
significant marketing force. Through a profusion of consumer-generated videos, blogs, and
Websites, consumers are playing an increasing role in shaping their own brand experiences.
Beyond creating brand conversations, customers are having an increasing say about everything
from product design, usage, and packaging to pricing and distribution.

RELATIONSHIP DEVELOPMENT STRATEGIES

We have discussed what relationship-based marketing is, and why it is more important
than ever in today’s business world. Now, we’re going to give you some actionable relationship
marketing strategies that we hope will be successful for you and your business. Aside from that
be sure to be on the lockout for mentions of tools that can help you along the way!

1. Networking
Networking, online and off, can be a powerful relationship marketing technique.
This isn’t just for job seekers! Think about the interests that you have as a business, and
then join groups that share our affinities. This not only helps your brand awareness, but
also expands your potential customer base. It’s a win-win. Not to mention that the only
tool you’ll need for this is your brain. Pick something you like and keep in mind what
people similar to you might enjoy.

2. Cherish Each Customer

Not just in the way that every company says that it does. Make sure that every
interaction you have with your customers shows them that they are valued.
Spontaneous recognition of your current customers can go a long way. When people
feel valued, they let others know. Delight your customers with the unexpected (in a
good way) and be there for them no matter what. Social monitoring tools, such as Brand
watch, can help you gauge your impact, particularly with tying a physical campaign to
digital gains.

3. Listen to your Customers

Listen to your customers! Every business says it does, but not all follow through
or apply what they’ve heard. Even listening and responding to compliments can be
beneficial. People love knowing they’ve been heard. Even complaints can be a blessing
in disguise. People often just want someone to share their concerns with. By listening to
these concerns, you ensure that your customers feel valued. Plus, if you learn what
people love and dislike about you, you can leverage the feedback to improve your
business. If you use Microsoft Dynamics CRM, PowerSurvey and PowerSurveyPlus are
great tools that allow you to get this kind of feedback. They also allow for anonymous
responses, meaning you can survey the web!
4. Build a Brand Identity
A memorable brand will make it easy for customers to find you and your
product(s). Customers will gravitate toward what they find that is memorable. If your
brand resonates, they will likely remember you and you can develop the relationship
further. Once you have a strong brand identify, those who wish to become a raving fan
will know what you stand for and why they should care.

5. Give Your Customers Free Information

What’s better than free? Not much. Your customers are seeking information
about your product(s). They have questions. Give them answers! Identify the topics and
interests your customers have. Then, create something cool around those topics and
give it to them free access. People know that you are just trying to get their contact
information to sell to them if you gave it. You can certainly generate leads this way, but
you’ll want to also give away some stuff for free. Answer the people!

6. Loyalty Rewards
No, I’m not talking strictly about loyalty cards and perks programs. Though those
are great, if you want to truly succeed at relationship marketing, and you should, you
need to expand beyond the traditional types of programs. People love getting stuff and
people love being recognized. Combine the two along with some of what we’ve been
mentioning. Cherish your loyal customers and reward them! You can create the perfect
loyalty program and manage it with a tool like BigDoor.

7. Communicate Often
Relationships are based on communication. Your customers are users want to
communicate with them often. Relationship marketing works well when you strive to be
there for your customers. Social media, email, advertising, and content are all means to
communicate to your customers who want to receive messages that way. Be sure to
send follow-up communications where appropriate.

8. Special Events
Holding a special event for your existing or prospective customers is a great way
to build relationships. If you put on a great event about a topic that your customers care
about, they will remember that experience and remember your business. Likely, they
will rave about the event you held and how great it was. You can also leverage
exclusivity here by holding an event for your top customers. It’s a way to add incentive,
but it is also a way to simply thank your customers.

9. Face to Face Time

Similar to a lot of what we’ve been mentioning, it comes back to interactions.
While electronic communication is great, and often preferred, having a face-to-face
meeting can help the customer feel valued. Consider stopping by customer’s place of
business, or work in some face-to-face time by holding a special event. Whichever
method you choose, you can be sure that it will bring a level of personalization to your
relationship marketing strategy.
The nine strategies given will help you really win when it comes to relationship-
based marketing. Of course, you’ll also want to tie your efforts to an ROI. Dynamics CRM
 can help you manage your customer relationships seamlessly, which makes it one of the
most important tools for this kind of strategy.

SUCCESSFUL CUSTOMER SERVICE STRATEGY IN THE PHILIPPINE

BUSINESS ENTERPRISE
Accenture Customer Strategy and Transformation
Helping clients redefine customer service as part of an overall strategy to achieve high
performance.
We help client provide differentiated service experiences based on the expectations and
requirements of individual customer segments, and on the current and potential value of those
segments.
We help enterprises integrate new service models that appeal to a more varied
consumer base, target the right sets of customers and use technology to produce value-based
service experiences.
When combined, these capabilities can reduced churn and help drive predictable buying
behavior and loyalty among organization’s most important segments.
Accenture Customer Service Strategy and Transformation gives customer service
executives the power to achieve true customer centricity and reinvent customer service to:
1. Improve customer satisfaction at the transactional and relationship levels.
2. Get the right answer to the right customer through the right channel at the right time.
3. Develop cost-efficient service delivery that balances value to the customer with
enterprise value.
4. Enable a differentiated service proposition across the entire value chain and customer
life cycle.

Customer Service that Touches the Heart!

Yesterday, I took Philippines Airlines for the first time for a business trip to Manila from
Singapore. What I saw touched my heart, and made me realize what customer service really is.

A baby was crying almost for an hour, and i could see the mother trying her best to calm
the child down, to no avail. She looked frustrated and stressed, embarrassed. After serving the
meals, an air stewardess approached the mother and asked to hold the child. She soothed the
child, patting him on his back and calmed him down. It took quite a long time, and the baby fell
asleep, and she returned him to a grateful and relieved mother.

I was observing the entire episode because I had requested for a drink from the same air
stewardess. When I asked her again, she apologized and quickly got it. But I did not blame her;
instead, I was impressed with the service from the heart. The care she gave to a fussing child
and the relief to the mother was heartfelt and genuine. I gladly waited for her to ease the child
before asking for my drink again.

I have taken airlines that won multiple awards for service, but I have seen none like that
– service from the heart. You can win awards for excellent service by training your staff,
establishing service protocols etc etc and have excellent service from robotic airline staff. The
danger of ‘over-proceduring’ service can get the job done efficiently but it does not touch the
heart.
 As I stepped off the plane, I could not help but wonder, how do we reproduce customer
service like that?

Some key questions to ponder in the quest to find the answer:

1. Does your company have a great culture?

2. Does your company have the right values?
3. Does your company have the right people – not just the competent ones, not just those
who care about what they do, but those who care for others?
4. Does your organization know, or care, or even realizes that your customers are human
beings with needs, fears and wants?

Philippines Airlines, kudos to you!

I will take this airline again.

Reference:
https://goodstrategy.net/2015/03/23/customer-service-that-touches-the-heart/

Globe Telecom hailed best in customer experience by World Communication

Awards
Harnessing social media as a new way to engage and interact with customers.

Globe Telecom bagged one of the biggest and most prestigious citations it has received
to date after winning Best Customer Experience in the 2013 World Communication Awards.

As the only Philippine telco to qualify in the said category, Globe topped global telcos
TalkTalk Business, Telstra, and Vodafone Turkey to bring home the much-coveted award,
joining the ranks of international telecom companies in the WCA Roll of Honor.

Globe was awarded Best Customer Experience for its innovative customer service
program that harnesses the power of social media. Globe launched a social media strategy
geared at significantly changing the way the company provides customer service through social
networking site Twitter in a manner that is engaging, meaningful, and personal. This strategy
created an avenue for honest and sincere communication, enabling the brand to proactively
build lasting relationships with customers through their social networks.

Part of the strategy is to also transform the company’s social media presence to be the
right customer service channel for end-to-end support, which includes hand-picking online
specialists with a unique personality and having them monitor the official Globe Telecom
Twitter account 24/7, defining what customer service should be.

With this, Globe achieved its goal to deliver a state-of-the-art customer relationship
management system through social media. The company has provided a seamless online
communication process that caters to its growing Twitter audience. Through an innovative
approach to customer engagement, Globe continues to delight and gain the loyalty of
subscribers by means of personalized communication and dedicated customer service.
 “We are delighted to receive this honor and be recognized as the world’s best in
customer experience through a customer service program powered by social media. This is an
important citation for Globe because we are all about providing superior service, as we
constantly find new ways to deliver a differentiated customer experience, which now includes
social media as a customer touchpoint to engage our subscribers anytime, anywhere,” said
Chris Lipman, Head of Customer Experience at Globe.

Recently, Globe was also awarded Best in Customer Service Initiative for its Customer
Service Innovation on Social Media at the Asia Communication Awards, which recognizes the
achievements of telecommunications companies and individuals in the region responsible for
the innovations, achievements and new services that build the industry.

Globe was also recently accorded the Award of Excellence at the Philippine Quill Awards
organized by the International Association of Business Communicators (IABC) for its Talk2Globe
customer service channel.

Now in its 15th year, the World Communication Awards celebrates the innovations that
underpin the industry and will carry it through into a brighter future. Nineteen categories were
awarded this year, with all categories thoroughly reviewed. The winners were determined
based on written submissions and the deliberations of an independent and recognizably expert
panel of judges.

Reference:
https://orangemagazine.ph/2013/globe-telecom-awarded-by-world communication-awards/

Jollibee
Jollibee attributed its growth over the years to its efforts towards establishing a superior
manufacturing and logistics framework; to the extra attention paid to the menu; to its
marketing efforts; to Tony's strong leadership; and to its focused approach towards
globalization. According to an article in the Asian Business Review, Jollibee also owed its
success to its constant attention to three crucial issues: innovation, testing and piloting.

Serving the Customers

At Jollibee, customer service was given a lot of importance. In fact, customer service
was one of the key result areas (KRAs) on which employees were evaluated at the company.
The importance given to this issue was also reflected in the company's corporate mission and
vision statements (Refer Table I for Jollibee's values, mission and vision statements). The
company advertised extensively through the print as well as the electronic media. While the
national-level campaigns were handled centrally, local promotions were managed and
implemented by individual stores.

References:
https://www.icmrindia.org/casestudies/catalogue/Business%20strategy1/Business%20Strategy
%20Jollibee%20Fast-
Food%20the%20Filipino%20Way.htm#:~:text=Jollibee%20attributed%20its%20growth%20over,
its%20focused%20approach%20towards%20globalization.
Chapter 2 Activity:
Direction: Answer the following questions. Write your answer in a separate sheet of paper
1. What is the process of relationship marketing?
2. How do you determine the value of your customers?
3. What are some relationship development strategies?
4. How can customer service be improved?

Activity 2.1
Marketing Project in the Real World: Good Service – Bad Service
Think if your own customer service experiences, one where you received good service and
another where you received bad service. Your two experiences can be from different industries.
1. Think about what the good service provider said or did to create good service. How did
the service provider make you feel?
2. Think about what the bad service provider said or did to create bad service. How did the
service provider make you feel?

GOOD SERVICE BAD SERVICE

Story Context

Said

Did

Felt

Based on what you decoded above, what did you discover about how to give good service and
how to avoid bad service?
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