705721VIT

Marketing Management
business school

Building
Building Customer
Customer Satisfaction,
Satisfaction,
Value,
Value, and
and Retention
Retention

EK BUNCHU
ek@ba.cmu.ac.
Department of Marketi
Faculty of Business Administrati
Chiang Mai Universi
 1. Customer Satisfaction
 The level of a person’s felt state resulting from
comparing a product’s perceived performance in
relation to the person’s expectations

P<E P=E P>E

Dissatisfied Satisfied Delighted
(Highly satisfied)
What A Highly Satisfied Customer Does

 Stays loyal longer

 Buys more as the company introduces new products
and upgrades existing products
 Talks favorably about the company and its products
 Pays less attention to competing brands and
advertising and is less sensitive to price
 Offers product/service ideas to the company
 Costs less to serve than new customers because
transactions are routinized
How Customers Handle Dissatisfaction
 Take no action
 Take some form of public action
 Seek redress directly from business firms
Take legal action to obtain redress
Complain to business, public, or governmental
agencies
 Take some form of private action
Stop buying product/brand or boycott seller
Warn friends about the product and/or seller
 Methods of Tracking and Measuring
Customer Satisfaction

Complaint Customer Ghost Lost

and satisfaction shopping customer
suggestion survey analysis
systems
 2. Customer Perceived Value
 The difference between total customer value and total
customer cost
 Total Customer Value
The bundle of benefits customers expect from a
given product or service
 Total Customer Cost
The bundle of costs customers expect to incur in
evaluating, obtaining, and using the product or
service
Determinants of Customer Perceived
Value
Customer
Customer
perceived
perceived
value
value
Total
Totalcustomer
customervalue
value Total
Totalcustomer
customercost
cost

Product Services Monetary Time

value value cost cost

Personnel Image Energy Psychic

value value cost cost
 Value Chain
Activities
Support

Firm Infrastructure

Human Resource Management

Technology Development
Profit
Procurement Margin
Activities
Primary

Inbound Outbound Marketing Customer

Logistics Operations Logistics & Sales Services
 3. Retaining Customer
 The need for customer retention
 Offensive marketing typically costs more than defensive marketing
Offensive marketing is designed to obtain an objective, usually market
share, from a target competitor.
Whereas, Defensive marketing warfare strategies are a type of
marketing warfare strategy designed to protect a company's
market share, profitability, product positioning, or mind share.
 It requires much effort and cost to induce satisfied customers to switch
away from their current suppliers
Customer Development
Process
Disqualified Inactive or Partners
prospectsex-customers
Advocates

Retaining
Suspects Clients Customers

Retaining
Repeat
Prospects Customers
customers

1st-time Retaining
Attracting
Customers
New customers
Customers
Customer Relationship Management
(CRM)
 The task of creating strong
customer loyalty and
retaining customers
Adoption

Trial

Evaluation
Interest

Awareness

New Product Adoption Process

 Levels of CRM

High margin Medium margin Low margin

Basic or
Accountable Reactive
Many customers Reactive

Proactive Accountable Reactive

Medium number
of customers

Partnership Proactive Accountable

Few customers
 Customer Equity
 The aim of CRM is to produce high customer equity
 The more loyal customers, the higher customer equity
 Three drivers of customer equity:
Value equity
Brand equity
Relationship equity
 (a) Value Equity
 The customer’s objective assessment of the utility of
an offering based on perceptions of its benefits relate
d to its costs
 Subdrivers of value equity:
Quality
Price
Convenience
 (b) Brand Equity
 The customer’s subjective and intangible assessment
of the brand, above and beyond its objectively percei
ved value
 Subdrivers of brand equity:
Brand awareness
Customer attitude toward the brand
Customer perception of the brand ethics
 (c) Relationship Equity
 The customer’s tendency to stick with the brand,
above and beyond objective and subjective assessmen
ts of its worth
 Subdrivers of relationship equity:
Loyalty programs
Special recognition and treatment programs
Community building programs
Knowledge building programs
 Retention Building Approaches
 Adding financial benefits
Frequency programs
Club membership programs
 Adding social benefits
Customization and customerization
 Adding structural ties
Create long-term contracts
Charge a lower price to consumers who buy more
Turn the product into a long-term service
 4. Total Quality Marketing
Strategy
 Quality
 The totality of features and characteristics of a
product or service that bear on its ability to satisfy
stated or implied needs
 Performance quality
 Conformance quality

 Total Quality Management (TQM)

An organization-wide approach to continuously
improving the quality of all the organization’s
processes, products, and services
 Roles of Marketers in
Total Quality Marketing Management
 Marketers bear the major responsibility for correctly
identifying the customers’ needs and requirements

 Marketers must communicate customer expectations

correctly to product designers
 Roles of Marketers in
Total Quality Marketing Management
 Marketers must make sure that the customers’ orders
are filled correctly and on time

 Marketers must check that customers have received

proper instructions, training, and technical assistance i
n the use of the product
 Roles of Marketers in
Total Quality Marketing Management
 Marketers must stay in touch with customers after the
sale to make sure that they are satisfied and remain
satisfied

 Marketers must gather and convey customer ideas for

product and service improvements to the appropriate
company departments
 5. Internal Marketing
 The task of successfully
hiring, training, and Company
motivating able

Ex
e tin

te r
employees who

ark

na
want to serve the

lM
customers well M
al

ark
ern

et
Int

ing
Employees Customers
Interactive Marketing
A High-Performance Business
Environment
Stockholder Satisfaction
Business Sales
growth & Profits
Customer Satisfaction

Higher-quality products and services

Continuous Breakthrough
improvements innovations
Employee Satisfaction

Internal Marketing