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Lesson 4 - Relationship Marketing

The document discusses relationship marketing and customer relationship management, defining these concepts and explaining their importance for customer retention, satisfaction, and developing long-term customer relationships. It also covers strategies for managing customer service quality, such as establishing clear objectives and collecting regular customer feedback, and explains how maintaining customer information and interactions can help businesses better understand and serve their customers.

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114 views18 pages

Lesson 4 - Relationship Marketing

The document discusses relationship marketing and customer relationship management, defining these concepts and explaining their importance for customer retention, satisfaction, and developing long-term customer relationships. It also covers strategies for managing customer service quality, such as establishing clear objectives and collecting regular customer feedback, and explains how maintaining customer information and interactions can help businesses better understand and serve their customers.

Uploaded by

Egotharsis
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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RELATIONSH

IP
MARKETING
LEARNING OBJECTIVES:
At the end of the lesson, you are expected to:
● Define relationship marketing
● Explain the value of customers
● Identify and describe relationship
development strategies
● Illustrate successful customer service
strategy in the Philippine business
enterprise
Relationship Marketing
This is a form of marketing developed from direct response marketing
campaigns that emphasizes customer retention and satisfaction rather than
sales transactions,
It recognizes the long-term value of customer relationship and extends
communication beyond intrusive advertising and sales promotional
messages.
Relationship marketing has continued to evolve as technology opens more
collaborative and social channels such as tools for managing relationships
with customers.
Customers
This is a person or organization that transacts with a business person or
business organization to buy goods or services for monetary or other
valuable considerations.

Acquiring and keeping customers is the end goal of businesses because


customers create demand.

Because customers have varying needs and preferences over time,


organizations must be able to offer products at the time when customers
need them.

Companies must predict customer needs.


Customer Service
This is the process of ensuring customer satisfaction with a
product or service.
It involves activities designed to enhance customer
satisfaction, or the perception that a product has met or
exceeded expectations.
Customer not only buys a product or pays for a service, but
also the entire purchase or shopping experience.
Managing Customer Service Quality
In order to ensure the consistency of customer service quality,
organizations conduct rigid customer service training and assess
periodically how services are delivered.
● Identification of customer service problems,
● Areas of improvement, and
● Current levels of customer satisfaction.
Managing Customer Service Quality
Companies can best manage customers’ service quality by:
● Establishing service objectives with specific and measurable targets
● Committing sufficient organizational resource towards the achievement of
these targets
● Collecting customer feedback on service quality regularly
● Reviewing target accomplishment
● Identifying customer service weaknesses and connected

Note: It is better to exceed customers’ service expectations than to simply


fulfill or underachieve them.
Managing Customer Service
Differentiation
Customer-centered organizations can differentiate their
customer service through:
● The development and training of competent customer
contact personnel
● Designing and implementing a superior service delivery
environment and process.
Common Customer Service practices:
CUSTOMER SERVICE PRACTICE PRACTICING ORGANIZATION (s)

Free delivery Most restaurants and fast food chains

Automated in-home ordering system Some supermarkets and drugstores

Free gift wrapping/plastic book jacket Some department stores and bookstores

Merchandise/document pick-up Selected courier services

Free parking Some churches and religious organizations

Valet parking Some hotels and resorts

Reservations, installment plans Some large department stores, bookstores

Complimentary refreshments, waiting lounge Most car dealership


Common Customer Service practices:
CUSTOMER SERVICE PRACTICE PRACTICING ORGANIZATION (s)

Help desk, touch phone access, 24-hour Most utility firms and telecommunication
customer hotline firms

Free appliance installation Most appliance stores

Scheduled floral bouquet delivery Some flower shops

Drive-through Most fast food outlets

Free alterations on garments Selected apparel retailers

Complimentary massage Some barbershops and salons


CUSTOMER RELATIONSHIP
MANAGEMENT
This is all of the activities, strategies, and technologies that companies
use to manage their interactions with their current and potential
customers.
CRM helps businesses build a relationship with their customers that, in
turn, creates loyalty and customer retention,
A CRM tool creates a simple user interface for a collection of data that
helps businesses recognize and communicate with customers in a
scalable way.
Companies create and maintain customer database that
record and keep the following information:
● Customer names
● Birthdates
● Contact numbers
● Physical and email addresses
● Customers’ buying history and behavior
Effective guidelines in the implementation of customer
relationship management:
1. Adopt the right mindset towards customer service.
2. Purchase or develop CRM software.
3. Quantity customer acquisition and retention costs.
4. Develop and implement a customer service training program.
5. Empower sales persons to make decisions.
6. Establish communication lines between your customer and
customer contact staff.
7. Shop your competition.
8. Keep innovating customer service.
9. Promote genuine customer service with passion
CUSTOMER LIFETIME
VALUE
CVL is the forecasted sales or profits that a
company can derive from the entire span of its
future relationship with a particular customer.
A customer’s lifetime value can be based upon
the potential and profitability of his/her
relationship with the company.
The CVL perspective has several distinct implications:
● It considers a longer-term perspective of a company’s
relationship with customers in contrast to a short-term view of
“take the customer’s money and run”.
● It calculates and compares costs of acquiring customers and
keeping old ones.
○ Costs for getting new customers are called acquisition costs.
○ Costs for maintaining existing customers are called retention
costs.
● It highlights the importance of market segmentation, with the
recognition that some customer groups are more profitable than
others.
CVL can be measured using the formula:

CVL = (PV)(RP)(RT)
Where:
PV is the average peso value of a sale to a particular customer
or customer group
RP is the repeat purchase in a year
RT is the retention time in months or years
CVL is the customer lifetime value
Example: An athlete who spends P 2,000.00 for every visit to a
spa and goes to the spa twice a month for an expected time
period of five years would have a CVL computed as:

PV = P 2,000.00
RP = 24
RT = 5
CVL= ?

CVL = (PV)(RP)(RT)
= (2000) (24)(5)
= P 240,000.00
ACTIVITY~

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