Explain as to what customer value, satisfaction and loyalty represents in marketing management?
Customer value can be defined as receiving what is desired, receiving quality for what is paid, receiving something in return for what is given or a getting a reasonable cost for the product/service.
It can be defined as the satisfaction received by the customer in regards of the money, data, time and his knowledge.
The customer perceived value is seen in terms satisfaction one received in return of the payment made for the product or service.
Customer Perceived Value(CPV)= Total Perceived Benefits – Total Perceived Cost
Money is an important factor in buying anything, However, there are different parameters which can be used by a seller to define the customer value. A customer value can be in any form such as in respect of their product or services, such as quality, time, service, marketing, social influence, experience with the product.
For Example, the cost price of the perfumes is very low, but they are advertised by the celebrities to create a perception of luxury in our mind and its perceived value can be far greater. It provides us a psychological as well as an image benefit.
The entire idea of a customer value means that, the customer should feel the worth of their money spent and satisfied by the product or services that they receive.
Customer Satisfaction can be termed as the measurement tool used to check how successful is a business in providing quality product or services to their customers to overcome their expectations.
If the performance of the product/services falls short of expectations the customer is dissatisfied. It is important to provide complete customer satisfaction as it not only maintains an existing customer, but also helps in bringing in new number of customers into the business. It always falls cheaper to maintain the relations with an existing customer, than spending out a huge amount of finance in marketing to attract new customers. If a customer remains satisfied with the product and services they not only remain loyal to the company, but they also bring up the goodwill of the company by their word of mouth, which in return attracts new customers into the business.
Customer Loyalty is defined by the entire process in which a customer provides repeat business to an organization by returning frequently. It is when a customer chooses to buy the products or services of the same business repeatedly rather than opting for similar products by the other competitors. Customer loyalty is important in maintaining the foundation of a business. When a customer remains loyal to a business they serve as medium in increasing the business by their word of mouth. When a customer remains loyal they serve as a important medium in attracting new customer and hence saves a large amount of finance expenditures for marketing.
Importance of empathising on customer value, satisfaction and loyalty to the success of a company
Customer Value: It is important to empathise on customer value as it helps an organisation to grow faster. Due to the changes in the current technology and the existence of high competencies, customer values also help in influencing the customers future purchase which is integral for the growth of the business. In short, the balance of power has been shifted from the companies to the valuable customer. Customer value is essential for analysing the customer approach in this competitive market.
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If customer value is not given a high priority in a business, it can result in the complete failure of the system or a high loss in revenues. In short, for any business to survive, it is very important that they create superior values to their customers. Once business understands their customer values they can manage it properly and run it in an efficient manner. It gives them the proper direction in which they should work to succeed.
Customer Satisfaction: If a customer is satisfied by the product or services, they tend to remain loyal to the business and keep purchasing which keep us ahead out of the competition and also helps in increasing revenues. A loyal customer is worthier as it becomes difficult to attract new customers into a business. If we make them dissatisfied our competitors can take the advantage and can get a chance to go ahead. It would make them to say some bad words which could result in creating a bad image or result in losing the customer.
Customer Loyalty: Loyal customers contributes major portion of the revenues so making them dissatisfied can adversely affect our business. Loyal customers can act as brand ambassador and words from their mouth can bring more customers to the business than another kind of advertisement. They protect the business from the competition as new customers will be more likely to switch to our competitors hurting the sales. They could make us stand ahead in business and also helps in building good reputation about the business. Loyal customers offer honest feedback as they know about the services and will help in building future strategies and improving the loopholes.
Choose an established company and outline how this company is managing the relationships with their customers. Also, make suggestions on how this company could improve relations with its customers based on what you have learned in class or based on any other ideas you might have. (If you would rather talk about a company that you intend to start as opposed to an established company, you may do so)
The Crowne Plaza Hotel and Resorts have been selected in order to understand the relationship of business and customer. Many parameters are followed by the Crowne Plaza to maintain long term relationships with their customers over the years. Some of the key main parameters are as follows:
- Maintain feedbacks from the customers: Feedback is the most fundamental tool to judge the satisfaction level of the customer. Feedback is taken from every customer even after a small drink to regulate and maintain the services in the hotel. Customer inputs can be given using the website, on forms or by contacting them by their 24/7 available customer care services. The Crowne Plaza stands out in their customer services as they not only take the feedbacks, but they believe in acting immediately to improve their services. They also take every feedback positively and try to satisfy the customer by giving compensations for the services that have failed to keep the customers happy.
- Timely response through Apps and 24/7 customer care services: Using the customer care services we can change the date of reservation or cancel the reservation, can ask for current offers, promotions and packages. The live agents are available 24*7 to solve any kind of queries.
- Attractive Services:They provide sleep advantage program in which there is provision of aromatherapy kits and guaranteed wake up calls. The Gym is provided to keep us fit and energetic. We can ask for fresh meals at any point of time. As internet has become has our basic need, so they are giving free unlimited wireless services in the Hotel.
- Meeting Partner:Meeting partner is a group of people who help the customers in arranging for conferences or informal meetings. They guide the customers about expenses and different sorts of arrangements that could be done within their budget. They also inform the customers about the best space and how they can keep the attendees happy and more energetic.
- Giving Offers and Deals:Different kind of offers and deals are given to make by the stay at the Crowne Plaza more productive. One such service is that customers get 1 night free stay if they book their stay for more than 7 days. Many deals are given to attract customers by giving extra discount on booking for certain period of time i.e. bookings made between January to March will get extra 30% discount. Sometimes breakfast meals with a wide spread of varieties are also provided to customers who are willing to pay a little extra. Kids are given complimentary meals as well.
- IHG Rewards Club Card:It is a loyalty card that can be used to enjoy more savings on the given rate, free internet and can earn free bonus points for every big spend at the hotel and resort. They have their tie up with many multinational brands of different areas which provides us the facility to use our bonus points for clothing,
travelling, food, lifestyle, airport and lounge facilities. These points can also be used as cash at various stores. Sometimes, they offer loyal card members a chance to earn more points it might be 5 times or 10 times so as to keep them attached. It keeps customers attached to them as well as loyal customers get a chance to save a lot of money.
- Provide Best Price:It is a deal that we can’t get lower prices than their website if we become able to find out the lowest rate on any other website or agents for the hotel services, so they will offer us 5 times of our booking price as bonus points in our IHG Club Card which can be used on the next stay or for purchasing.
The Crown Plaza is providing the best services in their sector and they have maintained their level in hotel industry from the day it started. But, I feel there is still need of few small amendments that can make it more attractive destination for the customer and make it more interesting. There are some steps that can be taken to improve our relationship with customers:
- Kids Friendly Zone: Providing kids friendly zones can be a stress buster to many parents who often cancel their outings due to the responsibility of their kids. This would not only let the customers enjoy their stay at the hotel but can also be a reason for them to return back to the hotel.
- Pampering customers: Pampering customers by providing them with services that would make them relax is another way of attracting customers. For example, customers would generally enjoy a cool drink on a hot day or vice versa. Similarly providing customers with a decorated room on their honeymoon or chocolates in their rooms can also make them feel special.
- Pick up and drop services: Customersoften find it difficult and expensive to arrange for travel during their stay. If free pick up or drop services are provided for return customers, it can be an added advantage and an attractive facility as well.
- Free laundry service: Laundryservices are expensive in most of the hotels, however they are also a basic need of any customer. Hence providing a free laundry service which can be limited to a single outfit can be attractive to any customer and can also not be a loss to the hotel as well.
- Free Spa for regular customers: Spa services are the best means for customers to feel completely relaxed. However, customers do not opt for it as they are very expensive. Hence if complimentary spa services can be offered especially to the loyal customers this can be an added advantage to them and a strong reason for them to return.
- Buttle, F., Maklan, S (2003). Customer Relationship Management: Concepts and Technologies (3rd ed.). London and New York: RouledgeTaylor and Francis Group.
- Cochran, C. (2003). Customer Satisfaction: Tools, Techniques, and Formulas for Success. California: Paton Professional.
- Duchessi, P (2002). Crafting Customer Value: The Art and Science. Indiana: Purdue University Press.
- Sheth, N. J., Parvatiyar A., Sheth J. N(Ed.) (2000). Handbook of Relationship Marketing. United States of America: Sage Publications, Inc.
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