The document discusses relationship marketing and customer relationships. Relationship marketing focuses on keeping current customers rather than acquiring new ones. It has the goals of attracting, retaining, and enhancing customer relationships. Successful service recovery is important for customer satisfaction, loyalty, and profits. When failures occur, companies should act fast, admit mistakes, understand the customer perspective, and consider compensation to regain goodwill.
The document discusses relationship marketing and customer relationships. Relationship marketing focuses on keeping current customers rather than acquiring new ones. It has the goals of attracting, retaining, and enhancing customer relationships. Successful service recovery is important for customer satisfaction, loyalty, and profits. When failures occur, companies should act fast, admit mistakes, understand the customer perspective, and consider compensation to regain goodwill.
The document discusses relationship marketing and customer relationships. Relationship marketing focuses on keeping current customers rather than acquiring new ones. It has the goals of attracting, retaining, and enhancing customer relationships. Successful service recovery is important for customer satisfaction, loyalty, and profits. When failures occur, companies should act fast, admit mistakes, understand the customer perspective, and consider compensation to regain goodwill.
The document discusses relationship marketing and customer relationships. Relationship marketing focuses on keeping current customers rather than acquiring new ones. It has the goals of attracting, retaining, and enhancing customer relationships. Successful service recovery is important for customer satisfaction, loyalty, and profits. When failures occur, companies should act fast, admit mistakes, understand the customer perspective, and consider compensation to regain goodwill.
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CHAPTER 5
BUILDING CUSTOMER RELATIONSHIPS
Definition of relationship marketing • Relationship marketing is a philosophy of doing business, that focuses on keeping and improving current customers rather than on acquiring new customers. • Relationship marketing philosophy assumes that consumers prefer to have an ongoing relationship with one organization than to switch continually among providers in their search for value. The marketing strategy continuum
Transaction marketing Relational marketing
Customer service not valued Customer service is paramount
Little commitment to customers Quality is the concern of all
Internal marketing is give little or no Internal marketing is strategically
attention important Goals of relationship marketing • The primary goal of relationship marketing is to build and maintain a base of committed customers who are profitable for the organization. • A firm which holds the view of relationship marketing shall focus on the attraction, retention, and enhancement of customer relationships. The Goals of Relationship Marketing Graphically Benefit to the service provider • Relational customers tend to increase their purchases over time. • Long-term satisfied customers will engage in positive word-of-mouth recommendation • There is less need to offer price promotions to this group. Indeed these customers are likely to be less price-sensitive than others Benefit to the customer • Confidence benefits arise from feelings of trust or comfort, or conversely from fewer feelings of anxiety, with the service provider. • Social benefits often arise when the customer receives more than the technical benefits of the service: • Special treatment benefits include such things as getting preferential treatment, Levels of relationship strategies • Financial bonds: Basically the customer is incentivized with reduced prices over time for remaining with the company. Or some sort of volume discount. • Social bonds: Companies seek to build more intimate relationships through social or interpersonal bonds. • Customization bonds: The service provider is attempting to create these types of bonds when it customizes the service that is delivered to particular groups of customers. • Structural bonds: As with customization, these types of bonds are more prevalent in business-to-business markets. CHAPTER 6 SERVICE RECOVERY • Service recovery is systematic efforts by a firm after a service failure to correct a problem and retain customer’s goodwill. • Successful complaints handling is one strategy for what has come to be known today as service recovery. Importance of service recovery • Customer satisfaction • Customer loyalty • Repurchase effect • Increased sales and bottom line profit The service recovery paradox • Customers who are dissatisfied but experience a high level of excellent service recovery may become more satisfied and more likely to repurchase than those who were satisfied in the first place. • Even if do it right the first time is preferable, when a failure occurs every effort should be made for superior recovery. Customer complaint • Complaints are defined as any expression of dissatisfaction or concern made to the organization by, or on behalf of. • the first law of service productivity and quality might be "Do it right the first time," Customer Response to Service Failures This model suggests at least four major courses of action: • Do nothing • Complain to the service firm • Take action through a third party (consumer advocacy group, consumer affairs • or regulatory agencies, civil or criminal courts) • Switch suppliers and discourage other people from using the original service firm (through negative word-of-mouth) Guidelines for Effective Problem Resolution 1. Act fast 2. Admit mistakes but don't be defensive. 3. Show that you understand the problem from each customer's Point of view. 4. Don't argue with customers 5. Acknowledge the customer's feelings 6. Give customers the benefit of the doubt 7. Clarify the steps needed to solve the problem 8. Keep customers informed of progress 9. Consider compensation 10. Persevering to regain customer goodwill Types of Complainers Passives • Do not take action. • Believe that the consequences of complaining will not merit the time and effort they will expend. • Do not complain to the provider and third parties • Are less alienated from the market place. • Do not have a complaining personality Voicers • Are the service providers best friend • Complain to the service provider • Do not complain to third parties • Do not spread negative word of mouth • Do not switch patronage • Believe that complaining has a social benefit and positive outcomes. Iratest
• Are more angry with the service provider
• May or may not complain to the provider • Engage in negative word of mouth • Switch patronage and feel alienated from the market place Activists • Complain to friends and relatives • Complain to a third party • Are alienated from the market place. • May become terrorists in extreme cases What Do Customers Expect When They Complain • 1. Outcome fairness • 2. Procedural fairness • 3. Interactional fairness Customers expect to be treated politely with care and honesty. Training and empowerment are basis for interaction fairness Service recovery strategies • 1. Do it right the first time • 2. Welcome and encourage complaints • 3. Act quickly • 4. Treat customers fairly • 5. Learn from recovery experiences • 6. Learn from lost customers
Building Customer Relationship: Relationship Marketing, Relationship Value of Customers, Customer Profitability Segments, Relationship Development Strategies, Relationship Challenges
Building Customer Relationship: Relationship Marketing, Relationship Value of Customers, Customer Profitability Segments, Relationship Development Strategies, Relationship Challenges
