BERMAN05.PPT 43KB Jun 05 2011 09:30:17 PM
MARKETING CHANNELS
Relationship Marketing
and
Customer Service
Berman Chapter 5
Version 3.0
1
Relationship Marketing
• 1. Introduction - a,b,c,d
• 2. Evaluating the Use of Relationship
Marketing
• 3. Developing a Customer Service Strategy
• 4. Implementing a Customer Service
Strategy
• 5. Customer Service Standards in Physical
Distribution
• 6. Evaluating Customers on the basis of
Multiple Customer Service Standards
2
1 a. Transactional Marketing
• transactional marketing
– multiple sources of supply
– switches frequently among suppliers
– buys largely on price basis
• focuses on exchanges in single transactions
– adversarial in nature
– maximize short term profitability
– little trust or commitment
3
1. a Transactional Marketing
• Three fundamental assumptions
– buyer plays off suppliers to gain price
concessions and ensure continuity of supply
– buyer allocates an amount to suppliers to keep
them in line
– buyer assumes arms-length posture
– buyer uses only short term contracts
• criticisms - too little attention to holding
existing customer through superior customer
service and loyalty
4
1. b Relationship Marketing
• basis – building and maintaining long term relationship
between buyers and sellers
– based on trust and commitment
• elements - similar to personal relationships
– shared values, trust, mutual respect, mutual
benefit, frequent communications, honest
feedback, cooperation, flexibility,
understanding, relationship commitment
5
1. b Relationship Marketing
• emphasis
– keeping existing customers
– forming and maintaining strong long-term ties
• social (friendship)
• economic ( joint investment)
• technical ( joint product development)
• basis
– communications, consultancy, conflict
resolution, value added services, coordinated
responsibilities, long term relationships
6
1. c Levels of Relationship
Marketing
• One
–
–
–
–
financial bond,
customer marketing orientation,
low degree of service customization,
low potential for sustained competitive
differentiation
7
1. c Levels of Relationship
Marketing
• Two
–
–
–
–
social bond
client marketing orientation
medium degree of service customization
medium potential for sustained competitive
differentiation
8
1. c Levels of Relationship
Marketing
• Three
– structural bond
– client marketing orientation
– medium to high degree of service
customization, high potential for sustained
competitive differentiation
9
1. d Implications of
Relationship Marketing
– opportunity costs
•
•
•
•
Distributor Decision Making
Product Decision Making
Pricing Decision Making
Promotion Decision Making
10
2. Evaluating the use of
Relationship Marketing Strategy
• Advantages and Disadvantages
• When transactional and relationship
marketing are best used
• lost-for-good customers
• always-a-share customers
11
3. Customer Service Strategy
• A. Definition of Customer Service
– a customer-oriented corporate philosophy
– integrated and managing all elements of the
customer interface
– to meet or exceed expectations of customer
service quality
12
3. Customer Service Strategy
a. development
• Components by stage
– pretransaction - internal operations
– transaction - physical appearance,order status,
order accuracy
– posttransaction - startup, problem handling
•
•
•
•
service gap
process related activities
outcome related activities
zone of tolerance
13
3. Customer Service Strategy
b. Economics
• Three approaches
– loss in profits due to defecting customers
– impact of small changes in customer retention
on sales and profits
– impact of changes in customer service is
determined on sales
14
3. Customer Service Strategy
c. Models
• Porter’s Value Chain
– high reliability, ease of use, ease of repair
– product adequacy determination
• SERVQUAL dimensions (Zeithaml)
– reliability, responsiveness, assurance
– empathy, tangibles
15
4. Customer Service Strategy
a. Implementation
• A. Total quality management and Customer
Service
–
–
–
–
constant feedback
benchmarking
use of multifunctional task forces
total employee involvement
16
4. Customer Service Strategy
b. Common principles
–
–
–
–
have a written customer service policy
monitor customer service levels
get employees close to the customer
study customer service as defined by the
customer
– empower the employee
– facilitate customer access to the company
– resolve complaints favorably for customers
17
b. Common principles
–
–
–
–
–
think in terms of lifetime income
think in terms of profit stream
utilize technology
make customer service part of the career path
be concerned with
• customer retention
• obtaining new customers
18
5. Customer Service Standards
in Physical Distribution
• Characteristics
– ease of inquiry, order placement,order retention
– timely, reliable order delivery and
communications
– accurate, complete, undamaged orders and error
free paperwork
– accurate, timely generation and transmission of
information to support planning, management
and execution of the above activities
19
• Characteristics (cont)
– availability
– timeliness
– quality
• reliability measure
• service failures
• fraction of demand billed from stock
• minimum sum of the cost of inventory and
backorders
20
6. Evaluating Suppliers
Multiple Customer Service
Standards
A. the linkage between quality measures
–
–
–
–
–
product
sales
installation
repair
billing
21
A. The Linkage Between Quality Measures
-reliability 40%
product - easy to use 20%
30% - features/functions40%
sales
30%
Overall
Quality
- knowledge 30%
- response 25%
- follow-up 10%
- delivery interval 30%
installation - doesn’t break 25%
10%
- installed when
promised 10%
repair
15%
- no repeat troubles 30%
- fixed fast 25%
- kept informed 10%
billing
15%
- accuracy,no surprises 45%
- first call resolution 35%
- easy to understand 10%
22
Relationship Marketing
and
Customer Service
Berman Chapter 5
Version 3.0
1
Relationship Marketing
• 1. Introduction - a,b,c,d
• 2. Evaluating the Use of Relationship
Marketing
• 3. Developing a Customer Service Strategy
• 4. Implementing a Customer Service
Strategy
• 5. Customer Service Standards in Physical
Distribution
• 6. Evaluating Customers on the basis of
Multiple Customer Service Standards
2
1 a. Transactional Marketing
• transactional marketing
– multiple sources of supply
– switches frequently among suppliers
– buys largely on price basis
• focuses on exchanges in single transactions
– adversarial in nature
– maximize short term profitability
– little trust or commitment
3
1. a Transactional Marketing
• Three fundamental assumptions
– buyer plays off suppliers to gain price
concessions and ensure continuity of supply
– buyer allocates an amount to suppliers to keep
them in line
– buyer assumes arms-length posture
– buyer uses only short term contracts
• criticisms - too little attention to holding
existing customer through superior customer
service and loyalty
4
1. b Relationship Marketing
• basis – building and maintaining long term relationship
between buyers and sellers
– based on trust and commitment
• elements - similar to personal relationships
– shared values, trust, mutual respect, mutual
benefit, frequent communications, honest
feedback, cooperation, flexibility,
understanding, relationship commitment
5
1. b Relationship Marketing
• emphasis
– keeping existing customers
– forming and maintaining strong long-term ties
• social (friendship)
• economic ( joint investment)
• technical ( joint product development)
• basis
– communications, consultancy, conflict
resolution, value added services, coordinated
responsibilities, long term relationships
6
1. c Levels of Relationship
Marketing
• One
–
–
–
–
financial bond,
customer marketing orientation,
low degree of service customization,
low potential for sustained competitive
differentiation
7
1. c Levels of Relationship
Marketing
• Two
–
–
–
–
social bond
client marketing orientation
medium degree of service customization
medium potential for sustained competitive
differentiation
8
1. c Levels of Relationship
Marketing
• Three
– structural bond
– client marketing orientation
– medium to high degree of service
customization, high potential for sustained
competitive differentiation
9
1. d Implications of
Relationship Marketing
– opportunity costs
•
•
•
•
Distributor Decision Making
Product Decision Making
Pricing Decision Making
Promotion Decision Making
10
2. Evaluating the use of
Relationship Marketing Strategy
• Advantages and Disadvantages
• When transactional and relationship
marketing are best used
• lost-for-good customers
• always-a-share customers
11
3. Customer Service Strategy
• A. Definition of Customer Service
– a customer-oriented corporate philosophy
– integrated and managing all elements of the
customer interface
– to meet or exceed expectations of customer
service quality
12
3. Customer Service Strategy
a. development
• Components by stage
– pretransaction - internal operations
– transaction - physical appearance,order status,
order accuracy
– posttransaction - startup, problem handling
•
•
•
•
service gap
process related activities
outcome related activities
zone of tolerance
13
3. Customer Service Strategy
b. Economics
• Three approaches
– loss in profits due to defecting customers
– impact of small changes in customer retention
on sales and profits
– impact of changes in customer service is
determined on sales
14
3. Customer Service Strategy
c. Models
• Porter’s Value Chain
– high reliability, ease of use, ease of repair
– product adequacy determination
• SERVQUAL dimensions (Zeithaml)
– reliability, responsiveness, assurance
– empathy, tangibles
15
4. Customer Service Strategy
a. Implementation
• A. Total quality management and Customer
Service
–
–
–
–
constant feedback
benchmarking
use of multifunctional task forces
total employee involvement
16
4. Customer Service Strategy
b. Common principles
–
–
–
–
have a written customer service policy
monitor customer service levels
get employees close to the customer
study customer service as defined by the
customer
– empower the employee
– facilitate customer access to the company
– resolve complaints favorably for customers
17
b. Common principles
–
–
–
–
–
think in terms of lifetime income
think in terms of profit stream
utilize technology
make customer service part of the career path
be concerned with
• customer retention
• obtaining new customers
18
5. Customer Service Standards
in Physical Distribution
• Characteristics
– ease of inquiry, order placement,order retention
– timely, reliable order delivery and
communications
– accurate, complete, undamaged orders and error
free paperwork
– accurate, timely generation and transmission of
information to support planning, management
and execution of the above activities
19
• Characteristics (cont)
– availability
– timeliness
– quality
• reliability measure
• service failures
• fraction of demand billed from stock
• minimum sum of the cost of inventory and
backorders
20
6. Evaluating Suppliers
Multiple Customer Service
Standards
A. the linkage between quality measures
–
–
–
–
–
product
sales
installation
repair
billing
21
A. The Linkage Between Quality Measures
-reliability 40%
product - easy to use 20%
30% - features/functions40%
sales
30%
Overall
Quality
- knowledge 30%
- response 25%
- follow-up 10%
- delivery interval 30%
installation - doesn’t break 25%
10%
- installed when
promised 10%
repair
15%
- no repeat troubles 30%
- fixed fast 25%
- kept informed 10%
billing
15%
- accuracy,no surprises 45%
- first call resolution 35%
- easy to understand 10%
22