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Topics Covered

Topics Covered. Relationship Marketing Retention Strategies Loyalty programs Benefits of Relationship Marketing Targeting profitable customers. ‘At Your Service’ Spotlight: Wine for Dudes. Where c ustomer service is King!. Full service website Quarterly newsletter

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Topics Covered

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  1. Topics Covered • Relationship Marketing • Retention Strategies • Loyalty programs • Benefits of Relationship Marketing • Targeting profitable customers

  2. ‘At Your Service’ Spotlight: Wine for Dudes Where customer service is King! • Full service website • Quarterly newsletter • social networking • Word of mouth marketing • ‘Dudes of Fortune Quiz Challenge’ • Personal relationships with customers • Accommodates individual needs • Customized group tours • Encourages repeat customers • Company merchandise as gifts • “Dudes Dollars” trip vouchers • Customer service recovery: • “wine heals all wounds”

  3. Relationship marketing • A form of marketing that attracts customers, retains them, and enhances their satisfaction. • Less expensive to attract repeat customers • Dramatic increases in profits • Spend twice as much gross income • Enhancing customer satisfaction includes: • Nurturing individual relationships • Making customers feel unique • Making customers feel singled out for attention • Loyalty programs

  4. Customer Relationship Management Model Figure 7.1(Source: Based on Winer, 2001)

  5. Levels of retention strategies Figure 7.2(Source: Adapted from Zeithaml and Bitner, 2000)

  6. Industry growth in loyalty programs • Social media • Experiential benefits • Customized reward programs • Matched benefits across brands • Coalition model • Corporate-wide • Across brands • Hybrid approaches Figure 7.2 (Source: Adapted from Zeithaml and Bitner, 2000)

  7. 2008-2010 loyalty program memberships growth in US Table 7.1 (Source: Based on Hlavinka and Sullivan, 2011)

  8. Hospitality and tourism loyalty programs • Frequent flyer rewards • Repeat customers • Highest fare holders • Elite status customers •  Co-branded credit cards • Issuers pay carriers for miles awarded • Significant income source • Hotel loyalty programs: • Complimentary meals, internet access • Included in franchise fees • Joint programs for smaller brands, boutique hotels • Frequent diner programs: • Rewards Cards • Non-financial incentives e.g. ‘Jump the Line’ perk • Hybrid approaches

  9. Service loyalty classification scheme Figure 7.3 (Source: Adapted from Dick and Basu, 1994)

  10. Snapshot: Legend Golf & Safari Resort • Getting to the heart of customer relationship management by focusing on customer preferences. • Corporate relationships linked to management strategies • Dedicated guest relations managers and frontline employee feedback • Customer Relationship Management (CRM) strategy • ‘Operation Boat Float’ (OBF). • ‘Most Valued Client’ • Customer feedback • Attention to unique requirements • Rated response

  11. Benefits of Relationship Marketing • Customers loyalty incentives: • High perceived value • ‘Get’ should exceed ‘Give’ • Rewards for loyalty • Company benefits: • Higher profits through retaining customers • More purchases overall • More frequent purchases • Lowers operating costs • No acquisition costs • Increases company referrals

  12. Benefits of relationship marketing Table 7.2

  13. Targeting profitable customers • Building and improving upon traditional segmentation • Studying loyalty- versus defection-prone customers • Identify profitability bands • Identify customers most likely to remain loyal • Develop overall strategy around these customers • Target with retention strategies • Other customers too costly to retain • Little potential to become profitable

  14. The 80/20 customer pyramid Figure 7.4(Source: Adapted from Zeithhaml and Bitnen, 2000)

  15. Managing loyalty and profitability Figure 7.5 (Source: Adapted from Kumar and Rajan, 2009, p. 5)

  16. A taxonomy of casino customer segments Figure 7.6 (Source: Watson and Kale, 2003)

  17. Case Study:Service Excellence at Sheraton Suites ….What people really remember is the guest experience. • Service interaction key to customer loyalty • Carefully selected and trained staff • Brand-specific programs • ‘Building World Class Brands’ • Staff empowerment • Strong service culture • Awards for service • Relationship marketing • Tailored to each guest • Personable, non-intrusive attention • ‘It’s Our Pleasure’ program • Starwood Preferred Guest program • Loyalty reward point system • Social media monitoring

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