PRINCIPLES OF
MARKETING
ROBERT JAY C. CAINDOC
Course Instructor
CHAPTER 2
CUSTOMER RELATIONSHIP: CUSTOMER
SERVICE
Lesson 1:
Relationship Marketing
RELATIONSHIP MARKETING
According to Serrano, Relationship Marketing
includes activities aimed at developing and
managing trusting and long-term relationships
with larger customers. (Customer profiles, buying
patterns, and history of contracts are kept in a
sales database)
RELATIONSHIP MARKETING
Relationship marketing is a strategy designed for
customer loyalty, interaction, and long-term
engagement to be fostered. Customer
Relationship focuses more on long-term retention
that acquiring large numbers of new and
potentially single-transaction customer.
Relationship Marketing is designed to develop strong connections with customers by
providing them with information directly suited to their needs and interests by
promoting open communication.
Characteristics of Relationship Marketing:
1. It focuses on the long-term rather than the short-term.
2. It focuses on partners and customers rather than on the company’s
products.
3. It puts more emphasis on customer retention and growth than on
customer acquisition.
4. It relies on cross-functional teams rather than on departmental-
level work.
5. It relies more on listening and learning than on talking.
Relationship marketing
calls for new practices
within the 4P’s
PRODUCT
More products are customized to the customers’
preferences
New products are developed and designed
cooperatively with suppliers and distributors.
PRICE
The company will set a price based on the
relationship with the customer and the bundle of
features and services ordered by the customer.
In business-to-business marketing, there is more
negotiation because products are often designed
for each customer.
PLACE
RM favors more direct marketing to the
consumer, thus reducing the role of middlemen.
RM favors offering an alternative to customers to
choose the way they want to order, pay for,
receive, install, and even repair the product.
PROMOTION
RM favors more individual communication and dialogue
with customers.
RM favors more integrated marketing communications to
deliver the same promise and image to the customer.
RM sets up extranets with large customers to facilitate
information exchange, joint planning, ordering, and
payments.
BENEFITS OF RELATIONSHIP MARKETING
In the business world, retaining customers has a
lesser cost at least eight times compared to
acquiring new ones. Thus, this marketing
capitalizes on the same fact and is beneficial to
the firm in several ways.
BENEFITS OF RELATIONSHIP MARKETING
1. Understanding customer 2. Delivery and meeting expectations
characteristics
The company can segregate its • If the firm knows what its
customers into groups based on customers’ needs are, it will help
their characteristics like reduce wastage due to trial and
purchasing power, frequency, and error methods. It is easier to
volume of sales transactions. It create a product if the features
also helps the company get and specifications of the
valuable feedback from its products are known.
customers and understand their
needs and expectations
BENEFITS OF RELATIONSHIP MARKETING
3. Repeat Business 4. Prevents negative transition
Sellers should maintain a Trust and loyalty go hand-
good attitude toward the in-hand and it is super
buyers. By doing this, the beneficial for all business.
buyers will that they do not
It will help customers turn
need to switch sellers.
to competitors.
BENEFITS OF RELATIONSHIP MARKETING
5. Word-of-mouth marketing 6. Increasing customer base
Satisfied existing customers are 100%
A happy customer will always more likely to recommend a
promote business by telling product/service to a prospective customer.
ten other people about the Apart from customer referrals, there are
several ways to increase customer
amazing services or satisfaction by employing methods of
performance received from a utilizing social networking sites, blogs,
company. informal surveys, benefits on loyalty cards,
timely responses to complaints and
requests as a constant reminder of its
presence around retention equity is
improved by enhancing customer
satisfaction.
BENEFITS OF RELATIONSHIP MARKETING
7. Reduced Marketing Cost 8. Minimization of customer
price sensitivity
Benefits also include A happy customer will be willing
lesser marketing costs and to pay more for a product if
more value creation. there is a guaranteed
satisfaction of products and
after-sales services attached to
the price.
BENEFITS OF RELATIONSHIP MARKETING
9. Identification with the 10.Product Market Expansion
company
The benefits are reaped both The company’s employees must
by the firm and the customers be ready to deliver beyond the
identify more with the company’s boundaries on
company. Keeping your customer demand.
communication line open and
keeping in touch with the
customers makes them feel
like they are being valued. It
will keep customers coming in
and build brand equity for the
company in the long run.
END OF LESSON
CHAPTER 2
CUSTOMER RELATIONSHIP: CUSTOMER
SERVICE
Lesson 2:
Customer Value
CUSTOMER VALUE
Customer Value is the relationship between
benefits and the costs including money, stress,
and time to sacrifice that is necessary to get these
benefits.
Or simply stated in a mathematical equation:
Benefits – Cost = Customer Value
In essence, customer value entails extraordinary of
four value-points or components known also as
SQIP
Service
Quality
Image
Price
Why is customer value important?
Zendesk’s 2022 Customer Experience Trends Report:
• 93 percent of customers will spend more with companies that offer
their preferred option to reach customer service.
• 90 percent of customers will spend more with companies that
personalize the customer service they offer them.
• 64 percent of business leaders say that customer service has a positive
impact on their company’s growth.
• 60 percent of business leaders say it improves customer retention
• 47 percent of business leaders report an increase in their ability to
cross-sell due to good customer service.
SERVICE
Is the intangible value offered to
customers.
QUALITY
Is the customer’s perception of how well a
company’s products and services meet
expectations.
IMAGE
Customers’ perception of the company or
business they interact with.
PRICE
The price a company can command for its
products and services that its customers are
able and willing to pay.
DELIVERING CUSTOMER VALUE
Three ways a company can establish customer
value to its customer base:
1. Provide consumers with the best cost.
2. Provide the consumer with the best product.
3. Provide the consumer with the best service.
Importance of Customer Value
1. Designing and providing superior customer
value are the keys to successful business
strategy in the 21st century.
2. Value reigns supreme in today’s marketplace
and market space
3. Customer will not pay more than a product is
worth and will reward excellence
Importance of Customer Value
4. A customer-centric culture provides focus and direction for
the organization, ensuring that exceptional value will be
offered to customers.
5. Designing and delivering superior customer value propels
the organization to a market leadership position in today’s
highly competitive global markets – absolute advantage.
6. Providing outstanding customer value has become a
mandate for management.
7. In choice-filled arenas, the balance of power has shifted
from companies to value-seeking customers.
Importance of Customer Value
8. Managing customer value is even more critical
to organizations in the new service and
information-based economy.
9. Firms not providing adequate value to
customers will struggle or disappear –
customer value is a key ingredient in building
competitive advantage
Importance of Customer Value
10. Today’s customers are quite smart and
sophisticated and are looking for companies
that:
a. Create maximum value for them based on their
needs and wants
b. Demonstrate that they value their business
Increasing Customer Value
1. Personalize your support interactions
2. Provide multichannel support options
3. Create a robust onboarding program
4. Prioritize customer success
5. Address patterns in support issues
6. Make sure customers know you’ve heard them
7. Find opportunities to surprise and delight
8. Acknowledge and reward customer loyalty
9. Give your customers a sense of community
Creating customer value for long-term success
People often measure a business’ success by its sales. But to
gauge a company’s long-term success, you also have to consider
another factor: the way customers feel after they make a
purchase.
To grow your company, customers should consistently feel your
product or service was worth its price. Prioritize quality and
offer competitive rates, and of course, deliver an above-and-
beyond support experience. Customers will see your value and
likely stick with your brand for years to come.
END OF LESSON
