Study Unit 9 - Chapter 14 Flashcards
(17 cards)
The nature & components if customer relationships
- components of relationships
- Trust
- Commitment
The nature & components if customer relationships
1. Trust
= belief in the reliability & integrity of other party
-parties rely on & believe each other & that they will not exploit one another
The nature & components of customer relationships
2. Commitment
=an ongoing relationship with another party that requires maximum effort at retaining it
-commitment to relationship between people is important as without it, the relationship will not continue in the future
Types of relationships
1. True relationships
- long-term relationships characterised by positive behaviours between the organisation & the client
- positive behaviour include positive “word-of-mouth” & “purchase behaviour “
- characteristics of a true relationshipalso include the presence of trust,relationship benefits & the absence of negative bonds
- a rrue relationship is based on the belief of both parties that the relationship is beneficial
Types of relationships
2. A spurious relationship
= on the opposite end of the continuum
1. Satisfaction level decreases
2. Little trust in the organisation
3. No strong bond
4. Neither the client nor the organisation wish to remain in the relationship
Building customer relationships: a process
- Co-creation as an input
=involving customers as participants in the production of a product/service
- important competitive advantage, especially when customer’s experience of the service is important
Co-creation
-benefits
- produces more creative ideas
- these ideas are highly valued by other consumers while also being easier for the organisation to implement
Building customer relationships: a process
Relationship outcomes
- customer retention
- is a topic that is receiving increasing attention among practitioners & marketing scholars alike, due to the developments in relationship marketing & the the changing paradigms in marketing
- is a topic that is important for all organisations, irrespective of the nature of the service they offer/ the customers to whom the service is offered
- the organisation placing much of its market-related activities on its existing customers
Building customer relationships: a process
Relationship outcomes
- customer retention
* benefits
- Profitability
- Cost issues
- The sales effect of loayal customers
- Increased brand equity
Building customer relationships: a process
Relationship outcomes
- components of customer retention
- Customer satisfaction & loyalty
- Customer relationships
Components of customer retention
- component 1: Customer satisfaction & loyalty
satisfaction = meeting of customer expectations & delivering on the promise made in the actual service delivery process
Loyalty = the willingness of a customer to keep buying from a specific outlet, store or service provider in the long term
- additudinal and behavioural loyalty
Components of customer retention
- component 2: Customer relationships
- changing customer needs also means that customers want to interact with organisations in different ways & customers may want to connect with multiple organisations to satisfy their needs, such as working with multiple financial service companies
Loyalty programs
- 1 of most popular strategies used to enhance customer retention
Objectives = sales increases & increases in the range of products purchased - enable organisations to collect data about customers & is a useful tool in developing customer experiences & encouraging customer referrals
Loyalty programmes
- benefits
Customer benefit= able to receive rewards for their purchases while providing information to the organisation regarding themselves & their behaviour
Loyalty programmes
- disadvantages
— do not generate/ contribute to increasing loyalty
- affect sales levels, but do not contribute to genuine relationships-building with customers
- customers are driven by the rewards
- short-term in nature
- privacy concern
Loyalty programmes
- managerial implications
- service organisations are required to invest in both the development of their staff, as well as in the infrastructure & technology required to successfully build their relationships
- investment can be financial/ in training staff, but both are necessary to ensure that
- staff are able to deliver excellent service
- organisation has to develop an organisational culture that enhances
Causes of service failures
= service failure implies the inability of a service organisation to meet customer expecatations
-examples of service failures
* malfunctioning
* incorrectness
* unavailability
* latenes
* slowness
* uncaring, impolite, unresponsive, unkwowledgeable staff e
