8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

1/9

11

Building Customer

SatisfactionA customer is satisfied when he gets a high

Customer Delivered Value.

Customer Delivered Value is the difference or a

ratio between Total Customer Value (Benefits)and Total Customer Costs.

Total Customer Value:Product Value + Services

Value + Personnel Value + Image Value Total Customer Cost:Monetary Cost + Time Cost

+ Energy Cost + Psychic Cost

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

2/9

21

Satisfaction is defined as . . . a persons feelings of pleasure or

disappointment resulting from comparing aproducts perceived performance (or outcome)

in relation to his or her expectations.

Methods to track or measure Customer

Satisfaction:Complaint & Suggestion Systems

Customer Satisfaction Surveys

Ghost Shopping

Lost Customer Analysis

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

3/9

31

Factors influencing performance

of Business:

Stakeholders: Customers, Employees,

Suppliers, Distributors etc.

ProcessesResources: Include labor, materials,

machines, energy, and information.

Organization: refers to the organizations

policies, structures, and corporate

culture.

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

4/9

41

Value Chain: What does it take toproduce & deliver Customer Value?

Value Chain is: A tool for identifying ways to create more customer

value

Value Chain identifies: Nine strategically relevant activities that create

value and cost in a specific business. These

activities are divided into: Primary Activities

Support Activities

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

5/9

51

Generic Value Chain Given by Porter

Firm Infrastructure

Human Resource Management

Technology Development

Procurement

Inbound

LogisticsOperations

Outbound

Logistics

Marketing

& salesService

MA

R

G

I

N

S

U

P

P

OR

T

P

RI

M

A

R

Y

Activities

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

6/9

61

Value Delivery Network: When apart from its

own value chain, the firm tries to influence

the value chain of its suppliers, distributors etc.

Attracting Customers:Lead generation, lead

qualification and account conversion.

Computing the Cost of lost Customers: E.g. A Company has 10,000 accounts in one small city Company losses 10% = 1,000 of these accounts due to poor

service

Ave. lost a/c represented Rs. 12,000/- loss in revenue. Thus, thecompany lost Rs. 1,20,00,000/- revenue Assuming 20% profit rate, the company lost = Rs. 24,00,000/-

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

7/9

71

Need for Customer Retention:

Increased Revenue

Decrease in cost of selling

Advertising by old, loyal customers

Cross selling possibilities

William Sherdens 80-20-30 principle.

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

8/9

8/14/2019 Lec on 24 & 30 July_Building Customer Satisfaction

9/9

91

Some generic Concepts:

Concept of a Profitable Customer:This is a person, household or company that over

time yields a revenue stream that exceed by an

acceptable amount the companys cost stream ofattracting, selling and servicing that customer.

Total Quality Management:

An organization-wide approach to continuouslyimprove the quality of all the organizations

processes, products and services.