Chapter 2 Customer Relationship

Download as pptx, pdf, or txt
Download as pptx, pdf, or txt
You are on page 1of 36

Principles of Marketing

Chapter 2: Customer Relationship


Lesson 1: Relationship Marketing
Lesson 2: Customer Value
Lesson 3: Customer Relationship Development Strategies
Lesson 4: Successful Customer Service Strategy in the
Philippines Business Enterprise
Lesson 1: Relationship Marketing
Learning Competency:
After going through this module, you are expected to achieve:
1. Define “relationship marketing”
2. Identify and describe “relationship development strategies”

3. Relate the topic in real life experiences or in life.

Today, most organization turn to view


customers as equal partners in the buying and
selling transaction. Through encouraging
customers to enter a long-term relationship
with repeat purchases or buy multiple brands at
a time from the firms, marketers are able to get
an apparent understanding of customer needs.
Relationship Marketing Defined
Its activities aimed at developing and managing trusting and long-term
relationships with larger customers.
Here are the main characteristics of relationship marketing:
1. It focus on the long-term rather than the short-term.
2. It focus on partners and customers rather than on the company
products.
3. It puts more emphasis on customer retention and growth that on
customer acquisition.
4. It relies on cross-functional teams rather on departmental-level
work.
5. It relies more on listening and learning than on talking.
6. Relationship marketing calls for new practices with the 4Ps.
(Product, Price, Place and Promotion)
Customer Relationship Management (CRM) – is focuses
more on long-term customer retention than acquiring large
numbers of new and potentially single-transaction customers.
Benefits in developing and implementing Customer Relationship
Management (CRM)
1. Consistent customer experience
2. Customer Feedback
3. Customer Profitability
4. Customer advocate
5. Innovation
Traditional Transaction Marketing – it is viewed as an
Independent agency always maneuvering to secure the best
terms.
We can distinguish five different levels of relationships that can be
formed with customers who have purchased a company’s product, such
as a car or a piece of equipment:
1. Basic. The company salesperson sells the product but does not follow
up in any way.
2. Reactive. The salesperson sells the product and encourages the
customer to call whenever he or she has any questions or problems.
3. Accountable. The salesperson phones the customer a short time
after the sale to check whether the product is meeting the customer’s
expectations. The salesperson also solicits from the customer any
product improvement suggestions and any specific disappointments. This
information helps the company continuously to improve its offering.
4. Proactive. The salesperson or others in the company phone the
customer from time to time with suggestions about improved product
use or helpful new products.
5. Partnership. The company works continuously with the customer and
with other customers to discover ways to deliver better value.
BENEFITS OF RELATIONSHIP MARKETING
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.
A. 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.
B. 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.
C. Repeat Business - sellers should maintain good attitude to the
buyers. By doing this, buyers will feel that they do not need to switch
sellers.
D. 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.
E. Word-of-mouth marketing - 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.
F. 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.
G. 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.
H. Product Market Expansion - the company’s employees
must be ready to deliver beyond the company’s boundaries on
customer demand.
Lesson 2 : Customer Value
Learning Competency:
* The learners shall be able to explain the value of
customers.
Customers now have an overwhelming
abundance of choice. They are accustomed to
competition, and the fragmentation of the market
because of the choices this provides. They have high
expectations and little loyalty to spare if they are not
met.
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
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.
In essence, customer value entails extraordinary delivery of
four value-points or components know also as SQIP:
1. Service – the tangible value offered to customers.
2. Quality – customers’ perception of how well a company’s
products and services meet expectations.
3. Image – customers’ perception of the company or business they
interact with.
4. Price - the company can command for its products and services
and that its customers are able willing to pay.
Customer Relationship Marketing -will make earlier agents of
change look inadequate. The key facilitator is technology available
to marketers. CRM weds the individual customer and technology in
ways that are unique. These fourth-wave relationships, propelled by
a confluence of technological advances, will themselves change at
geometric rates. (1) One-to-one marketing, (2) Database marketing,
(3) Integrated marketing, and (4) Interactivity.
(9) Nine Relationship Marketing Strategies and Tools
There are some actionable relationship marketing strategies that
we hope will be successful for you and your business from
www.powerobjects.com .
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 your affinities.
2. Cherish Each Customer - Not just in the way that every
company says that they do. Make sure that every interaction you
have with your customers shows them that they are valued.
3. Listen to Your Customers - Listen to your customers! Every
business says they do, 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
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.
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.
6. Loyalty Rewards - Loyalty programs encourage shoppers to
return to stores where they frequently make purchases.
7. Communicate Often - Relationships are based on
communication. Your customers and users want to communicate
with you, so be sure to communicate with them often.
Relationship marketing works well when you strive to be there for
your customers.
8. Special Events - Holding a special event for your existing or
prospective customers is a great way to build relationships.
9. Face-To-Face Time - Like 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. 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.
Customer service is meeting the needs and desires of any customer. Some
characteristics of good customer service include: Characteristics of Good
Customer Service:
• Promptness: Promises for delivery of products must be on time. Delays and
cancellations of products should be avoided.
• Politeness: Politeness is almost a lost art. Saying 'hello,' 'good afternoon,' 'sir',
and 'thank you very much' are a part of good customer service. For any business,
using good manners is appropriate whether the customer makes a purchase or not.

• Professionalism: All customers should be treated professionally, which means


the use of competence or skill expected of the professional. Professionalism shows
the customer they're cared for.
• Personalization: Using the customer's name is very effective in producing
loyalty. Customers like the idea that whom they do business with knows them on a
Types of Customers
There are four types of customers based on projected customer retention and
loyalty to the brand.
Strangers - are customers whose needs do not fit the company’s offerings.
The company does not need to invest and exert effort to win them.
Butterflies - as the name implies, are not loyal to specific brand because they
keep on looking for the best deals which may lead to patronizing other brands.
The company can enjoy profits from these customers only for a short period.
True friends - have needs that match the company’s offerings. They make
repeat purchases and patronize the brand as long as it satisfies their needs.
The company must invest in these customers and strengthen its relationship
with them.
Freeloaders - are loyal but not profitable because of the limited fit between
their needs and the company’s offering. For example, a few customers of a
salon patronizes its services regularly but do not generate enough profit to
sustain the maintenance costs, it can earn only if it raises the prices of its
services.
Lesson 3 : Customer Relationship Development
Strategies
Learning Competency:
* The learners shall be able to identify and describe
relationship development strategies.
When it comes in increasing profits, it’s tempting to
concentrate on making new sales or pursuing bigger accounts.
But attention to existing customers, no matter how small they
are, is essential to keeping any business thriving. The secret to
repeat business is following up in a way that has a positive effect
on the customer.
Benefits of Developing Customer Relationship
Customer Relationship – is a marketing approach that focuses
on creating an ongoing and long-term relationship with customers.
It is geared toward building and nurturing strong
consumers/customer connection and affiliation, rather that
pushing sales or purchases.
Some of the benefits in developing and implementing customer
relationship strategies are the following:
1. Consistent Customer Experience – organization that are
aligned across all touch points seamlessly share information and
work together to ensure customer’s need are addressed with
minimum effort.
2. Customer Feedback - when the organization’s culture
facilitates open communication and cooperation, consumer
concerns, complaint and compliments can quickly be addressed.
3. Customer Profitability – relevant communications and
offers motivate consumers to use the full complement of
product and service offerings.
4. Customer Advocates – consumers who are pleased and
enjoy a consistent experience increasingly share this
information with each other. Increasingly consumers are
turning to each other for suggestions and recommendations.
5. Innovation – organizations, like Starbucks through
myStarbucksIdea.com invite their customer to provide ideas.
Consumers are allowed share, vote and discuss each others'
ideas.
Differences among Customer Value, Satisfaction
and Retention
Customer Value
The Customer’s
perception of the
benefits that he or she Customer
gets from a product or Satisfaction
service, in relation to
The Customer’s
the price paid to obtain
evaluation of the
those benefits. Customer
performance of the
Retention
product or service in
The company’s
relation to his or her
effort to build and
expectations.
maintain loyalty of
customers.
Strategies in Developing Customer Relationship
Customers are known to be indecisive but they are looking for
something in common, “value at a fair price.” Customers value
relationship a lot, they are always looking for someone to
discuss their problems with and this is where the company comes
in.
1. Make every customer interaction count – the first strategy
to build a strong customer relationship is to make every
customer interaction count.
2. Follow-through on commitments and claims about
products or services – a business must a specific promise to
the customer and deliver on that promise if it intends to win
the heart of the customer.
3. Develop employees – customers appreciate service from well-
trained and friendly customer service staff.
4. Offer benefit and product value that responds to the
customer’s desires – another positive step to building a strong
customer relationship is to offer value to the customer.
5. Treat customers as individuals who are respected and value
– all businesses know how hard it is to find one good customer.
6. Listen to customers – even complaints can be a gift if handled
property and quickly. Be available and accessible when customers
have question, concerns, or comments.
7. Build a strong brand identity – make it easy for customers to
identify ones business or products in the midst of the crowd. Create
a winning slogan, tagged with catchy logo and a unique theme.
8. Surround customers with available information by using
emails website content, social media, and other methods of
outreach but do not be invasive – keep them informed on the
latest trend, price or development.
9. The business must have a website – if the company has none,
then it’s time to get one. If is has it should consider making its
website user-friendly and easy to navigate for new and existing
customers.
10. Reward loyal customers – this a point that can never be
emphasized. Most business go after new customers while forgetting
that the existing customers need to be taken care of.
11. Nothing strengthens a bond more than appreciation –
thanking customers for sticking to the company’s brand will go a
long way to make them know they are important. A simple “thank
you” package might be all the business needs to connect personally
with existing customers.
12. Create a blog about the business where discussion is more
casual and inviting – almost all businesses today maintain a blog.
A blog is a powerful communication tool that can help a company
stays in touch with its customers.
Lesson 4 : Successful Customer Service Strategy in the
Philippine
Business Enterprise.
Learning Competency:
* The learners shall be able to illustrate successful
customer service strategy in the Philippines business
enterprise.
Good customer service means having
thorough knowledge of the inventory, experience
with the products, and being able to help
customers make the best choices for them. Good
customer service is treating customer with a
friendly, helpful attitude.
CUSTOMER SERVICE STRATEGY DEFINED
- Is the act of taking care of the customer’s need by providing
and delivering professional, helpful, high quality service and
assistance before during, and after the customer’s
requirements are met.
A customer service strategy consists of the following elements:
1. A vision for customer service – communicating the
customer service vision is an important first step in service
strategy. Employees need to understand their role in the
meeting the needs of customers and how their work
contributes to the vision.
2. Assessing customer needs – it is important to find out what
customer needs and expects. It can be done by using
customer comment cards, satisfaction survey or focus groups.
3. Hiring for service – successful organizations have figured out
how to hire service-oriented employees. This is done by screening
potential candidates that have a natural tendency for service.
4. Organizational goals for customer service – customer
satisfaction should be measured against identified customer
needs. There should be measurable customer satisfaction goals,
and employees should be aware of those goals so they can help
the organization achieve its service objective.
5. Customer service training – every business should develop
customized employee training that expresses the organization’s
approach to service.
6. Employee accountability – employees should be held
accountable for the organization’s customer satisfaction goals.
Achieving the goals should be a cultural norm that is incorporated
into the performance management process.
7. Rewarding good service – strong service behaviors are
reinforced through a defined reward and recognition system.
This ensures that employees receive positive feedback when
they exhibit the desired customer service behaviors.

The SUKI SYSTEM in the Philippines


The “Suki” system is a system of patronage in which
a customer regularly buy their merchandise from a
certain client. In the merchandising business,
Filipinos often buy from specific suppliers who will
grant their customers reduced prices, good quality
and credit as well. These factors are the usual
components of becoming a “suki”.
CUSTOMER SERVICE STRATEGY IN THE PHILIPPINES
In the Philippines just like in other parts of the
world, the “you-scratch-my-back-I’ll-scratch-yours”
concept is a cornerstone of modern marketing, with
large companies from airlines and hotels to
supermarkets and coffee shops offering reward
programs in exchange for customer loyalty.
Loyalty and rewards programs is already been a
proven method of increasing business profits. Most of
the Philippine's businesses invest on this customer
service strategy. Example; Cebu Pacific, Starbucks,
Globe Telecom, ShoeMart (SM), Bank of the Philippine
Island (BPI).
CUSTOMER SERVICE in the Philippine Business Enterprise
Most companies provide a customer hotline that customers can call
inquiries, concerns and technical support. For example, customer can call PLDT
to ask for assistance regarding their Internet connection. The Customer
Service Representative (CSR) can either provide a step-by-step guide on how
to troubleshoot the problem or schedule a visit from a company technician,
depending on the issue at hand.
1. Email and SMS (Short Message Service) also help businesses
communicate with their clientele more easily as most consumers regularly
check their inboxes.
2. Social Networking Sites, aside from their primary function of connecting
people, have become a channel for netizens to ask for customer support. Globe
Telecom promptly responds to inquiries and complaints on Facebook and
Twitters and redirects the customers to the sites private messaging system for
further assistance.
3. Live chat support – facilitates real time correspondence between customer
and the company representative.
Activity:
Pictures Game
1. Communicate with customers
frequently and effectively
2. Offer customer rewards
3. Conduct special events and
offer sponsorships
4. Enhance customer service
5. Utilize languages to reach a
wider customer base
Activity#2

Role Play Rubrics:


CREATIVITY __________ 25%
Group 1: Communicate with customers frequently and
effectively
COOPERATION________25%
Group 2: Offer customers rewards
RELEVANCE___________25%
Group 3: Conduct special events and offer sponsorships
TIME OBSERVANCE____25%
Group 4: Enhance customer service

Group 5: Utilize languages to reach wider customer base


TOTAL------------------------
100%
ASSIGNMENT: Write your answers in yellow pad paper.

1. How should the company improve its customer service


through the levels of relationship marketing?
2. Explain how a company goes through the tiers of
customer value.
3. Enumerations:
a. (5) Five Benefits of Relationship Marketing
b. (5) Five Benefits in developing and implementing
Customer
Relationship Strategies
c. (5) Five Elements of Customer Service Strategy

You might also like