Creating Long-term Loyalty Relationships

The Cornerstone of holistic marketing is strong customer relationships. Marketers must win customers by connecting with them - listening and responding to them, informing, and engaging them, and maybe even energizing them in the process.

Building Customer Value, Satisfaction, and Loyalty

 

Consumers are better educated and informed than ever, and they have the tools to verify companies claims and seek out superior alternatives. Effective competition depends largely on the company's ability to do a better job of providing value to customers and meeting or exceeding their expectations.

Customer Perceived Value (CPV)

Customer-perceived value (CPV) is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

• Total customer benefit is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image.

• Total customer cost is the perceived bundle of cost customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychological costs.

• Loyalty is a deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.

• Value delivery system is all the experiences the customer will have on the way to obtaining and using the offering.

Measuring Customer Lifetime Value (CLV)

The maximizing long-term customer profitability is captured in the concept of customer lifetime value. Customer Lifetime Value describes the net present value of the stream of future profits expected over the customer's lifetime purchases. The company must subtract from its expected revenues the expected costs of attracting, selling, and servicing the amount of that customer, applying the appropriate discount rate. 

Customer relationship management (CRM)

Customer relationship management (CRM) is the process of carefully managing detailed information about individual customers and all customer touch points to maximize loyalty. CRM enables companies to provide excellent real-time customer service through the effective use of individual account information. Based on what they know about each valued customer, companies can customize market offerings, services, programs, messages, and media. CRM is important because a major driver of company profitability is the aggregate value of the company's customer base.

Attracting and Retaining Customers

Companies seeking to expand their profits and sales must spend considerable time and resources searching for new customers. The main steps in attracting and retaining customers show in term of a funnel. The marketing funnel identifies the percentage of the potential target market at each stage in the decision process, from merely aware to highly loyal.  

 

 

Database Marketing

Database marketing is the process of building, maintaining, and using customer databases and other databases (products, suppliers, resellers) to contact, transact with and build relationship with customers.

The Downside of Database Marketing and CRM

Five main problems can prevent a frim fromeffectively using database marketing for CRM.

1. Some situations are not conductive to database management, such as when the product is a once-in-a-lifetime purchase or when the unit sale is very small. 
2. Building and maintaining a customer database requires a large investment in computer hardware, database software, analytical programs, communication links, and skilled staff.
3. Getting everyone in the company to be customer oriented and to use the available information for CRM can be a challenge.
4. Not all customers want a relationship with the company and may resent having their personal data collected and stored.
5. The assumptions behind CRM may not always hold true. 

High-volume customers often know their value to a company and can leverage it to extract premium service and/or price discounts, so that it may not cost the firm less to serve them. Loyal customers may expect and demand more and resent any attempt to charge full prices.

SUMMARY

The Cornerstone of holistic marketing is strong customer relationships. Marketers must win customers by connecting with them - listening and responding to them, informing, and engaging them, and maybe even energizing them in the process. Consumers are better educated and informed than ever, and they have the tools to verify companies claims and seek out superior alternatives. Customer-perceived value (CPV) is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives. The maximizing long-term customer profitability is captured in the concept of customer lifetime value. Customer relationship management (CRM) is the process of carefully managing detailed information about individual customers and all customer touch points to maximize loyalty. Companies seeking to expand their profits and sales must spend considerable time and resources searching for new customers. The main steps in attracting and retaining customers show in term of a funnel. The marketing funnel identifies the percentage of the potential target market at each stage in the decision process, from merely aware to highly loyal. Database marketing is the process of building, maintaining, and using customer databases and other databases (products, suppliers, resellers) to contact, transact with and build relationship with customers. High-volume customers often know their value to a company and can leverage it to extract premium service and/or price discounts, so that it may not cost the firm less to serve them. Loyal customers may expect and demand more and resent any attempt to charge full prices.