Chapter 10 - Developing and Maintaining Long-term Customer Relationships

customer relationship management (CRM)

A business philosophy aimed at defining and increasing customer value in ways that motivate customers to remain loyal.

relationship capital

A key asset that stems from the value generated by the trust, commitment, cooperation, and interdependence among relationship partners

customer advocacy

Action on behalf of the customer to spread either positive or negative information about a company across their social media and online rating platforms.

share of customer

Increasing transactions to focus on more fully serving the needs of current customers.

customer success

Efforts to help customers to gain more value from products and utilize new features, services, and additional, complementary products that provide added value to the customer.

quality

The degree of superiority of a firm’s goods or services

core product

The heart of the firm’s product offering.

supplemental products

Goods or services that add value to the core product, thereby differentiating the core product from competing product offerings.

symbolic and experiential attributes

Features, such as image, prestige, and brand, that are created primarily through the product and promotional elements of the marketing program.

value

A customer’s subjective evaluation of benefits relative to costs to determine the worth of a firm’s product offering relative to other product offerings.

perceived value equation

(core product quality + supplemental product quality + experiential quality) / (monetary costs + nonmonetary costs)

transactional costs

The immediate financial outlay or commitment that must be made to purchase the product.

lifecycle costs

Any additional costs that customers will incur over the life of the product, such as the costs of consumable supplies, maintenance, and repairs.

nonmonetary costs

The time and effort customers expend to find and purchase goods and services

value consumption gap

Occurs when the value of a product changes after the customer makes a purchase, but the customer is unaware of or even confused by the changing product.

customer satisfaction

The degree to which a product meets or exceeds the customer’s expectations about that product.