CH 3

Customer Engagement

commitment to brand / products

Ways to Build Customer Engagement

Honesty, customer involvement (e.g., social media, surveys), sharing company stories to create emotional connections.

Examples of Technology-Driven Customer Engagement

chatbot customer service

Difference Between Satisfaction and Loyalty

Satisfaction = attitude

Loyalty = behavior

Value of Loyal Customers

spend more

pay more

less $ to retain them

Carl Sewell's customer lifetime value

A loyal Cadillac customer was worth over $300,000.

Avis' Approach to Customer Satisfaction

Improving satisfaction rather than lowering rates to gain market share.

Customer Satisfaction and Profitability

65% of business = existing customers,

new customers costs 5x more.

Market Share Growth and Customer Satisfaction Relation

Higher satisfaction = higher retention & financial success.

ISO 9000 and Customer Focus

Top management must ensure customer needs are met to enhance satisfaction.

ISO 9000 Requirements for Organizations

Determine and meet customer requirements, establish communication procedures, monitor customer satisfaction.

Influences on Customer Perceptions of Value and Satisfaction

The entire experience—purchase, ownership, and service.

General Motors Definition of a Quality Product

product provides a satisfying overall experience.

Companies' Responsibilities Beyond Reducing Defects

products delight customers and anticipate needs.

Customer focus

customers determine business success.

Okyakusama

Both 'customer' and 'honorable guest.'

Customer-Obsessed companies

Ritz-Carlton, Disney, Lexus

ACSI introduced + key components

1994, customer expectation, perceived quality & value

ASCI purpose?

measure customer satisfaction @ national level

ASCI evaluates what industries

domestic foreign with strong US mkt share

how does ASCI collect data/how frequently?

telephone interview national n=46,000, 1-3 economic sectors a quarter

asci computes how many levels of index

national: 4, economic: 10, specific: 43

customer focused first step

understand who customers are

who are customers?

end user consumer

internal employees

external distributors

internal customer supplier role

process owners/workers understand how their work links to final product

fundamental questions: identify cust-supp relationships?

• what G/S produced by my work?

• who uses them?

• who do i call/answer ?’s to

• Who supplies process inputs?

IDEO design starting point

deep understanding of product users (via anthropology, psychology, biomechanics)

cust expctations for credit card user: applying for account

accessible, repsonsive, accurate, professional

credit card user expectations: using card

easy,features,reasoamable fees, limit

credit card user expectations": billing

accurate, timely, easy to understand

how to gain mkt share insights

systematically exceed cust expectations in key areas

ford cust service standards

90 features → 7 service statements, 6 sales standards

how VOC info linked?

to design, prod, delivery

internet bank perceived quality categories

• cust serv

• banking serv product

  • online system

Advanced Circuits competetive strategy?

delivery time 3 days, fewer/smaller orders

advanced circuits cust service improve

fixed pricing, CC capabilities, timely promises

gap model relates to VoC?

gap model = process of translating cust needs to design, prod, delivery, identifies gapsexpec

gap model pitfalls?

info lost/misinterpreted

cust-focus organization components?

good policy, ppl, and processes

hot to foster cust satisfaction/engagement?

develop trust, communication, manage relationships

first 2 key processes in cust-focused organization

• sincere commitments to customers

• ensure quality cust-service contact

second 2 key processes in cust-fcused organization?

• selecting/develop cust contact employees

• manage complains/service recovery

example of simple customer commitment?

guaranteeing customer’s call/email will be returned promptly

common cust-commitmenets?

explicit guarantees/warranties

0 moment of truth

critical moment before purchase (custs do research)

cust contact requirements

• measurable performance levels (technical & behavioral)

(P&G) customer contact employee qualities

• interpersonal communication skills

• problem solving, patience, stress tolerance

• empathy/accuracy

what % of unhappy custs never complain

96%

one complaint = how many other issues?

1 complaint = 26 other cust issues, 6 = serious

how does resolving conflict affect cust retention?

50%+ complainers return if issue is resolved
95% if resolved quick

Cargill Corn Milling (CCM) complaint handle process

Record, Investigae, identify, review, implement

key steps for complaint response

acknowledgement, empathy, corrective actions, encourage loyalty despite

CARE

Clarify, Apologize, Resolve, Explain

LATTE

Listen, Acknowledge, take action, encourage loyalty

custom services to meet preferences

convenienc-based service (at home mettings)

Customer Experience (CX)

full journey of cust-company interactions

new role for CX?

Chief Customer Officer

how to measure everything

surveys & compare resultsL

Likert Scale

rate scale (1-10) for cust opinions

What did Deming emphasize/

cust feedback to improve products/process

common incentive for cust satisfaction

manager’s annual bonus

good cust serv measureing affects processes how

distinguishes low and high performing ones

grid plotting: Mean performance x important scores

areas of high importance & wasteful resources

customer satisfaction information key?

aids undestanding needs, improves processes

reasons for cust satis failure?

poor measurement, wrong quality dimensions, ignoring clients

NPS (net promoter score)

measures loyalty by likelihood to recommend

typical perceived value questions?

importance of benefits, delivery method