Slide 1Customer Loyalty and ProfitabilityCustomer Loyalty and ProfitabilityWhy are Customers Loyal?Foundation for LoyaltyReducing Customer DefectionsCustomer Relationship ManagementDiscussionQuestionThank youRelationships and Building LoyaltyAndrew SikulaBus 550Customer Loyalty and Profitability•Profit from increased purchases•Profit from reduced operating costs•Profit from referrals to other customers•Profit from price premium2Customer Loyalty and Profitability3Why are Customers Loyal?•Relationships–Greater Confidence–Social Benefits–Special Treatment4Foundation for Loyalty•Target the Right Customer•Value over Volume•Manage Customer Base–Platinum, Gold, Iron, and Lead•Customer Satisfaction and Service Quality5Reducing Customer Defections•Analyze Customer Defections•Address Key Churn Factors•Complaint Handling and Service Recovery•Increase Switching Costs6Customer Relationship Management•Customization and Personalization•Development and Management of Relationships•Common CRM Failures•Getting CRM Right7Discussion•How can PSI address its “lead” customers without jeopardizing its reputation?8QuestionCustomer loyalty is an important driver of a service firm’s profitability. The profits derived from loyal customers come from which of the following:a) Increased purchasesb) Reduced operation costsc) Referral to other customersd) Price premiumse) All of the above9Thank
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