3_Delivering Customer Values and satisfaction

Delivering Customer Values and satisfaction: 

Delivering Customer Values and satisfaction Part –I, Chapter-2 Faculty: Prof. Sharad Kamra

Business Components: 

Business Components The Factors that influence the performance of any business are: Stakeholders Processes Resources Organisation

Customer Satisfaction: 

Customer Satisfaction Peter F. Drucker “ M arketing means such a perfect understanding of customer that the Product or service fits him totally and sells itself” Satisfaction means fulfillment and gratification of customer needs, wants and desires. Satisfaction or dissatisfaction: Feeling derived after the usage, depending upon the promises, actual performance, expectations, past buying experiences, advise, reference groups

Delivering Customer value & satisfaction: 

Delivering Customer value & satisfaction Not just the people in charge of marketing are in charge of marketing. Must have an effective value chain focused on serving the customer. Employees need to be trained and understand what expectations are for customer service – and Need to be empowered to address certain situations.

Customer satisfaction: 

Customer satisfaction Satisfaction surveys Available at the end of the appointment or included in the billing statement – or online Don’t forget your referral sources One-on-one interviews are best So what do you do with the data? Third party reports are best (don’t shoot the messenger) Turn the results in to meaningful changes Follow-up on specific complaints or incidents – no matter how trivial – especially with referral sources

Concept of Value: 

Concept of Value Value Chain Providing Value Cost Balance Value Delivery system

Customer Value: 

Customer Value Generic Value Chain by Michael E Porter Support Activities Firm Infrastructure Human Resource Management Technology Development Procurement Primary Activities

Attracting & retaining Customers: 

Attracting & retaining Customers Attracting Customers Cost of Losing a Customer Need for retention Structural Ties

Attracting & retaining Customers: 

Attracting & retaining Customers Customer delivered value – the difference between total customer value and total customer cost. Value includes product, services, personnel and image value. Cost includes monetary, time, energy and psychic costs.

Customer loyalty & retention: 

Customer loyalty & retention Highly satisfied customers are: Less price sensitive More likely to talk favorably about you More likely to refer you to others Remain loyal for longer

Growing “share of customer”: 

Growing “share of customer” Increasing the share of the customer’s purchasing in your product category. Best way is through cross-selling Getting more business from current customers by selling them additional or complementary services

Customer Profitability: 

Customer Profitability Highly profitable customer Mixed-profitability customer Losing customer Highly profitable product ++ + Profitable product + + Mixed-profitability product + _ Losing product _ _

How to calculate profit : 

How to calculate profit In most business: Gross income – (cost of goods + expenses) = net profit In healthcare: Reimbursement income – (cost of goods + expenses) = net profit

Calculating profit: 

Calculating profit Reimbursement rates of 55% of dollars billed. For every $1 billed to a payer, only $.55 is collected. The cost to provide the service is approximately 50% of dollars billed. This cost is the sum of the cost of goods and total expense. So, for every $1 billed to a payer, it costs $.50 to provide the service.

Calculating profit: 

Calculating profit Reimbursement income ($.55) – (cost of good + expenses) ($.50) = net profit ($.05)

What is relationship marketing?: 

What is relationship marketing? Marketing designed to create, maintain, and enhance strong relationships with customers and other stakeholders.

Why is it important?: 

Why is it important? It costs five times as much to attract a new customer as it does to keep a current one satisfied. It is claimed that a 5% improvement in customer retention can cause an increase in profitability of between 25 and 85 percent depending on the industry. Likewise, it is easier to deliver additional products and services to an existing customer than to a first-time “buyer.”