Chapter One Customer Focus and Managing Customer Loyalty

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Chapter One Customer Focus and Managing Customer Loyalty

Chapter One Customer Focus and Managing Customer Loyalty

Customer Focus and Managing Customer Loyalty • • Customer focus and profitability Profit impact

Customer Focus and Managing Customer Loyalty • • Customer focus and profitability Profit impact of customer retention Managing customer loyalty Market-based management and customer focus Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -2

Weak Customer Focus Figure 1 -1 Underwhelming Customer and Shareholders Copyright © 2009 Pearson

Weak Customer Focus Figure 1 -1 Underwhelming Customer and Shareholders Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -3

Underwhelming Customers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -4

Underwhelming Customers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -4

Strong Customer Focus Figure 1 -2 Customer Focus, Customer Satisfaction, and Profitability Copyright ©

Strong Customer Focus Figure 1 -2 Customer Focus, Customer Satisfaction, and Profitability Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -5

(CSI) A Key Marketing Metric What if a company gets an average score of

(CSI) A Key Marketing Metric What if a company gets an average score of 72? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -6

(CS) A wide Angle View 83% 17% Past Behavior Sales and mkt. share is

(CS) A wide Angle View 83% 17% Past Behavior Sales and mkt. share is backward looking! Future performance Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -7

De-Averaging (CS) & (CP) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

De-Averaging (CS) & (CP) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -8

Customer Satisfaction • Measuring Customer Satisfaction – Customer Satisfaction Index (CSI) • Why is

Customer Satisfaction • Measuring Customer Satisfaction – Customer Satisfaction Index (CSI) • Why is it important? – Directly correlated to profits – Leading indicator of operating performance • Impact of Dissatisfied Customers Figure 1 -5 De-averaging Customer Satisfaction and Customer Profitability Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -9

De-Averaging (CS/CP) v. 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

De-Averaging (CS/CP) v. 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -10

(CS) And Retention v. 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice

(CS) And Retention v. 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -11

Dissatisfaction & Customer Exit Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Dissatisfaction & Customer Exit Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -12

Customer Satisfaction and Retention Figure 1 -6 Customer Satisfaction, Complaint Behavior, and Customer Retention

Customer Satisfaction and Retention Figure 1 -6 Customer Satisfaction, Complaint Behavior, and Customer Retention • Why is customer retention important? • How does a firm retain customers? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -13

Measuring Customer Retention Figure 1 -10 Customer Life Expectancy and Customer Retention Copyright ©

Measuring Customer Retention Figure 1 -10 Customer Life Expectancy and Customer Retention Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -14

Net Promoter Score Figure 1 -13 Net Promoter Score Copyright © 2009 Pearson Education,

Net Promoter Score Figure 1 -13 Net Promoter Score Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -15

Customer Loyalty • Why is it important? – Customer Recommendations • Measuring Customer Loyalty

Customer Loyalty • Why is it important? – Customer Recommendations • Measuring Customer Loyalty – Customer Loyalty Score (CLS) Figure 1 -14 Customer Loyalty Score Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -16

Managing Customer Loyalty Figure 1 -15 Managing Customer Loyalty Copyright © 2009 Pearson Education,

Managing Customer Loyalty Figure 1 -15 Managing Customer Loyalty Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -17

Customer Focus and Marketing Knowledge Figure 1 -17 Customer Focus and Marketing Knowledge Copyright

Customer Focus and Marketing Knowledge Figure 1 -17 Customer Focus and Marketing Knowledge Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -18

Market-Based Management Figure 1 -18 Market-Based Management Copyright © 2009 Pearson Education, Inc. Publishing

Market-Based Management Figure 1 -18 Market-Based Management Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -19

Market-Based Management and Customer Focus • Voice of the Customer • Customer Performance •

Market-Based Management and Customer Focus • Voice of the Customer • Customer Performance • Customer Leadership Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -20

Review • • Customer focus and profitability Profit impact of customer retention Managing customer

Review • • Customer focus and profitability Profit impact of customer retention Managing customer loyalty Market-based management and customer focus Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -21

All rights reserved. No part of this publication may be reproduced, stored in a

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -22