Kotler • Keller
Phillip
Kevin Lane
Creating Long-term
Loyalty
Relationships
Ch
ap
Discussion Questions
1. What are customer value, satisfaction,
and loyalty, and how can companies
deliver them?
2. What is the lifetime value of customers,
and how can marketers maximize it?
3. How can companies attract and retain the
right customers and cultivate strong
customer relationships?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 4 of 34
Customer Value, Satisfaction, and
Loyalty
Holistic
Marketing
Fi
gu
re
5.
1
Traditional Organization
vs. Customer-Oriented
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 6 of 34
Customer Perceived Value
Total
Customer
Cost
Total
Customer
Beneft
Fi
gu
re
5.
2
Customer-
perceived
value
Total
customer
beneft
Total
customer
cost
Product
beneft
Monetary
cost
Services
beneft
Time
cost
Personal
beneft
Energy
cost
Determinants
of Customer
Perceived
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 34
Value Concepts - Caterpillar
Worth to
farmer:
$20,000
Cost to
produce:
$14,000
Proft Price
Custome
r Value
$6,00
0
$20,00
Choice Processes and
Implications
Lowest
purchase
price wins.
Friends with
De
fn
ed
“A deeply held commitment to
rebuy or repatronize a preferred
product or service in the future
despite situational infuences and
marketing eforts having the
potential to cause switching
behavior.”
-- Oliver
Value Proposition
Core positioning:
•
Safety
Volvo
Other benefts:
•
Good performance
•
Design
•
Environmentally
De
fn
ed
A person’s feelings of
pleasure or disappointment
that result from comparing a
product’s perceived
performance to (or
Customer Satisfaction
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 14 of 34
Customer Expectations
Expectati
ons
Previous
purchases
Friends
Monitoring Satisfaction
Measurem
ent
Technique
s
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 16 of 34
Measurement Techniques
Customer Loss
Rate
Mystery
Shopper
Infuence of Customer
Satisfaction
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 18 of 34
Customer Complaints
25%
Stop buying
54% -
70%
Buy again if
resolved
95%
If resolved
Product and Service Quality
Performan
ce
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 20 of 34
Maximizing Customer
Lifetime Value
20% of
Custome
rs
80% of
Profts
Customer Proftability
Customer Lifetime
Customer Proftability
Analysis
De
fn
ed
A person, household, or
company that over time yields a
revenue stream exceeding by
an acceptable amount the
company’s cost stream for
attracting, selling, and serving
that customer.
Fi
gu
re
5.
3
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 24 of 34
Cultivating Customer
Relationships
Customer Information
•
Diferentiate
Customer Relationship Management
(CRM)
Personalizing
Marketing
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 26 of 34
One-to-One Marketing
Diferent
iate
customer
s
Identify
prospects
and
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 28 of 34
Customer Empowerment
Brand
Customer
Reviews/Recommendations
Negative
reviews
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 30 of 34
Customer Retention
Acquiring new customers
costs
5x more
than retaining current
customers
The average company
loses
10%
Of its customers
yearly
Reducing customer defections by 5%
can increase profts from
Attracting and Retaining
Customers
Reduce
Defections
1.Defne and
measure
2.Determine causes
3.Compare CLV to
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 32 of 34
Fi
gu
re
Building Loyalty
Interact with
customers
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 34 of 34
