Cultivating Customer Relationship

Successful use customer information to build strong long-term relationship.

Companies need to keep a check on the customer satisfaction…

Internet allowed marketers to abandon old mass market practices and

formulate new personalized marketing.

Personalizing the market is making sure brand and its market are relevant to the customers

A Challenge, given no two customers are identical

To adapt to customer’s desire for personalization, marketers embraced ideas of permission and one-one marketing

Customer may be nameless but

clients cannot be… Thoughtful companies

turn their customers to clients.

Permission marketing-

Marketing only after getting expressedpermission of the customer

Permission marketing-

Marketing only after getting expressedpermission of the customer

But, many a times

customers may have

conflicting needs or

undefined or ambiguous

preferences.

Permission marketing-

Marketing only after getting expressedpermission of the customer

But, many a times

customers may have

conflicting needs or

undefined or ambiguous

preferences.

• Identify your prospects and customers

• Differentiate them in terms of • Value to company

• Their needs

• Interact with customers and to know their needs

• Customize the product to each customer

Customers play a key role in setting direction of the brand and deciding on how it is marketed

“ Power is with the consumer and marketers and

retailers are scrambling to keep up with her. Consumers are beginning in a very real sense to own our brand and participate in their creation.

We need to learn to let go.“- A.G Lafley

Former Chairman, P&G

With increasing mistrust

of some advertising,

online customer ratings

and reviews are playing

vital role for internet

retailers such as

Amazon and Ebay

Negative reviews also can

be helpful, as consumer

can better learn the

advantage and

disadvantage through

negative reviews, resulting

fewer product return,

cutting on cost

Companies seeking to

expand their profit and sales :

• Develop ads and place

them in media

• Send direct emails to

possible new prospects

• Send salespeople to

participate in tradeshows

where they might get new

leads

• Purchase names from list

brokers etc…

Its not enough to attract new

customers; the company must also

keep them and increase business.

To o many company

suffer from

customer churn off or

defection. Adding

customers here is like

adding water to a leaky

bucket.

To reduce customer churn off

companies must :

• Define and measure retention rate

• Distinguish the causes of customer attrition

and manage them

• Compare the lost customer’s life time value

to cost of reducing defection.

spend money on retaining customer only if :

Lose profit > retention cost

Market funnel identifies the potential target

market at each stage in the decision process, from merely

aware to highly loyal

Target Market

Aware Open to trial

Recent user

Regular user

Most often used

Loyal Trier

The percentage of customers going from one stage to the next

in the funnel allows markets to identify any barriers in building a

loyal customer franchise

RETENTION

DYNAMICS

Interesting numbers:

Acquiring new customer can cost 5 times as retaining

current ones Average company loses 10% customers every year 5% reduction in defection

rate can increase profit up to 85%

Profit rate tend to increase over the customer lifetime due to increased purchases ,referrals ,reduced operating costs to services

Satisfied customers are company’s customer capital

A key driver of

shareholder value is

aggregate value of the

customer base.

Companies improve their customer base with strategies as follows :

• Reduce customer defection rate

• Increasing the longevity of customer relationships

• Enhancing the growth potential of each customer through

“Share of wallet” , cross-selling, and up-selling.

• Sales from existing customers can be increased with new

opportunities and offerings

• Making low-profit customers more profitable or terminating them

• To avoid direct termination, encourage customers to buy more

• Forego certain feature

• Pay higher amounts or fees

• Focusing efforts on high profit customers

• The most profitable ones can be treated in a special way.

Building loyalty and creating strong

customer relationship is the dream of every

marketer

Listening to the customer needs is

crucial to relationship

management. Many companies

have ongoing mechanisms that

keep their marketers permanently

plugged in to frontline customer

feedback

Building loyalty and creating strong

customer relationship is the dream of every

marketer

Listening to the customer needs is

crucial to relationship

management. Many companies

have ongoing mechanisms that

keep their marketers permanently

plugged in to frontline customer

feedback

Developing loyalty programs, that reward

high profit customers can help build strong

relations. Usually, companies create

Frequency programs in a way that lockscustomer in and creates significant loss

switching .

Building loyalty and creating strong

customer relationship is the dream of every

marketer

Listening to the customer needs is

crucial to relationship

management. Many companies

have ongoing mechanisms that

keep their marketers permanently

plugged in to frontline customer

feedback

Developing loyalty programs, that reward

high profit customers can help build strong

relations. Usually, companies create

Frequency programs in a way that lockscustomer in and creates significant loss

switching .

Limited member clubs help build long term loyal customers. Fees and membership conditions wards of people with fleeting interest.

Creating institutional ties

to provide customers with

special supplies or equipment

Win- Back ex-customers reviewing

and resolving exit

interviews and lost

customer surveys.

Special thanks

• https://www.flickr.com/photos/sean-b/• https://www.flickr.com/photos/danielygo/• https://www.flickr.com/photos/68751915@N05/• ttps://www.flickr.com/photos/griddlecakes/• https://www.flickr.com/photos/59937401@N07/• https://www.flickr.com/photos/61278574@N06/• https://www.flickr.com/photos/jordanfischer/• https://www.flickr.com/photos/stormkatt/• https://www.flickr.com/photos/jenumfamily/• https://www.flickr.com/photos/alancleaver/

Thank you!

Created by :

Ashwin SasikumarGovt. Model Engineering College, Kochi

Prof. Sameer Mathur

IIM Lucknow

www.IIMinternship.com

During an internship under :