Relationships and building loyalty
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Relationships and Building Loyalty. Andrew Sikula Bus 550. Customer Loyalty and Profitability. Profit from increased purchases Profit from reduced operating costs Profit from referrals to other customers Profit from price premium. Customer Loyalty and Profitability.

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Relationships and Building Loyalty

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Relationships and building loyalty

Relationships and Building Loyalty

Andrew Sikula

Bus 550


Customer loyalty and profitability

Customer Loyalty and Profitability

  • Profit from increased purchases

  • Profit from reduced operating costs

  • Profit from referrals to other customers

  • Profit from price premium


Customer loyalty and profitability1

Customer Loyalty and Profitability


Why are customers loyal

Why are Customers Loyal?

  • Relationships

    • Greater Confidence

    • Social Benefits

    • Special Treatment


Foundation for loyalty

Foundation for Loyalty

  • Target the Right Customer

  • Value over Volume

  • Manage Customer Base

    • Platinum, Gold, Iron, and Lead

  • Customer Satisfaction and Service Quality


Reducing customer defections

Reducing Customer Defections

  • Analyze Customer Defections

  • Address Key Churn Factors

  • Complaint Handling and Service Recovery

  • Increase Switching Costs


Customer relationship management

Customer Relationship Management

  • Customization and Personalization

  • Development and Management of Relationships

  • Common CRM Failures

  • Getting CRM Right


Discussion

Discussion

  • How can PSI address its “lead” customers without jeopardizing its reputation?


Question

Question

Customer loyalty is an important driver of a service firm’s profitability. The profits derived from loyal customers come from which of the following:

  • Increased purchases

  • Reduced operation costs

  • Referral to other customers

  • Price premiums

  • All of the above


Thank you

Thank you


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