Mm session3
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Transcript of Mm session3
Customer SatisfactionQuality, Service, and Value
Customer Value and Satisfaction
• A happy customer was a satisfied customer, a happy customer will be a repeat customer, and a repeat customer is a loyal customer.
What does it take to satisfy a customer?
Customer Value and Satisfaction
Customers are…• Estimate which offer will deliver the most value• Value Maximizers• Form an expectation of value
Customer Value and Satisfaction
Customer Value- the difference between the total customer value
and total customer cost.
Sources of Value• product• services• personnel• image
Customer Value and Satisfaction
Customer Delivered
Value
Product Value
Service Value
Personnel Value
Image Value
Monetary Price
Time Cost
Energy Cost
Psychic Cost
Total Customer
Cost
Total Customer
Value
Customer Value and Satisfaction
Satisfaction- level of a person’s felt state from comparing a
product’s perceived performance in relation to the person’s expectations
Delivering Customer Value and Satisfaction
Value Chain – a company tool for identifying ways to create
more customer value- a firm’s collection of activities that are performed
to design, produce, market, deliver, and support its product
Delivering Customer Value and Satisfaction
…to deliver Value you need…Core Business Processes• Product Realization Process – identifying, researching,
developing, and successfully launching new products with speed, high quality, and target cost attainment.
• Inventory Management Process – developing and managing the right inventory locations or raw materials and finished products.
• Order-to-remittance process – receiving orders, approving, shipping, and payment collection.
• Customer Service Process – after-sales services
Delivering Customer Value and Satisfaction
Cost of Lost Customers• Define Retention Rate – how much customers you keep• Causes of Attrition• How much profit you loose per customer lost – (customer
lifetime value)How much cost would it take to reduce defection rate.
Delivering Customer Value and Satisfaction
Levels of Customer Relations• Basic – no contact after sale is made• Reactive – seller encourages customer for contact after
sale is made• Accountable – seller contacts customer after sale is made
if satisfied• Proactive – seller contacts customer from time to time• Partnership – company continuously work with
customers to improve products and after-sales services
Delivering Customer Value and Satisfaction
A Profitable Customer… - a customer that yields a revenue stream over time, exceeding by an acceptable amount the company cost stream of attracting, selling, and serving that customer.
Delivering Customer Value and Satisfaction
• Rule #1. The Customer is always right• Rule #2. If Customer is wrong, see rule#1.
Delivering Customer Value and Satisfaction
Total Quality Management
Quality – totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs
Delivering Customer Value and Satisfaction
• Premises about TQM1. Quality must be perceived by Customers2. Quality must be reflected in every company activity3. Quality requires total employee commitment4. Quality requires high quality partners5. Quality can always be improved6. Quality improvement requires quantum leaps7. Quality do not cost more8. Quality is necessary but may nit be sufficient9. Quality drive cannot save a poor product.
Reading Assignment
• Developing Corporate Mission, Vision, and Objectives• The Boston Consulting’s Group Growth-Share Mix• Business Strategic Planning