MKTG 360 1nd Edition Lecture 13 Outline of Last Lecture 1. Why understand services?2. Four ways services differ from products3. Service quality- judgment service quality4. Gap model of service quality5. Core vs. supplementary service products6. Promoting positive responses to service failuresOutline of Current Lecture 1. Share of customer2. Lifetime value of customer3. Basic steps in CRMCurrent Lecture1. Share of Customera. Share of customer = % of purchases a customer makes within a given category from a certain company (vs. % of overall market)i. Billy buys 3 pairs of Nikes and 3 pairs of Adidas per year; thus, Nike has a 50% share of Billy’s athletic shoe purchasesii. Cloe buys 3 pairs of shoes per year, all of them from the Brooks brand; thus, Brooks has 100% share of Cloe’s athletic shoe purchases2. Lifetime Value of customera. Lifetime Value of Customer = Potential profit an individual customer generates over his/her lifetimeb. Customer equityThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.i. Customer value treated like a financial asset involving an investment and a returnii. Want to attract and retain customers who offer the best “investment”c. Focus on High Value Customersi. CRM can identify customers who have a high lifetime value and return forthe companyii. More intense marketing efforts (e.g., personal sales) can target the more valuable customersiii. Less labor intense marketing (e.g., direct marketing) can target less valuable customersiv.3. Basic Steps in CRMa. Know your customer in as much detail as possible i. Characteristics, needs, nature and frequency of prior purchases, responsiveness to previous ads, problems with the firm, returns, etc.)b. Differentiate customers based on needs and value to the companyi. High value vs. low value customersii. Tailor marketing mix based on values/needs/etc.c. Interact with customers and find ways to improve the interactionsi. Take on role of customer and find out how good your customer service isii. Reach out to customers and use incoming calls as selling opportunitiesiii. Improve complaint handlingd. Customize products to individual customersi. Customize marketing efforts to different customers based on needs,
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