W7 Analysis Assignment
Principles of Marketing 4.0
Jeff Tanner and Mary Anne Raymond
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CHAPTER 14
Customer Satisfaction, Loyalty, and Empowerment
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CUSTOMER EMPOWERMENT
PROVIDING TOOLS THAT ENABLE CUSTOMERS TO TAKE CONTROL OR INFLUENCE MARKETING
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LEARNING OBJECTIVES
Understand strategies involving online and personal forms of influencer marketing.
Relate influencer marketing to other forms of social communities and marketing strategies.
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CUSTOMER COMMUNITIES
Word of Mouth: the passing of information and opinions verbally.
Word of mouth has a powerful influence on purchasing decisions.
Buzz: refers to the amount of word of mouth going on in a market.
Companies try to create buzz about their products by:
Sending press releases
Holding events
Offering free samples
Writing blogs
Releasing podcasts.
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CUSTOMER COMMUNITIES
Some companies consider customer service to be a marketing channel and train their customer service representatives to identify sales opportunities and pitch products.
AOL
Some airlines
Banks
Other companies consider customer service to be a marketing channel only for generating positive word of mouth.
Do a great job with tough customers and encourage a positive review on a website.
This latter perspective recognizes that when customers want service, they don’t want to be sold, but it also recognizes that empowered customers can help market a product.
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INFLUENCER PANELS
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Influencer marketing
Targeting people known to influence others.
community
Social group that centers its attention on a particular brand or product category.
Social network
Another term for a community.
IDENTIFYING MEMBERS OF INFLUENCER PANELS
| Characteristic | Definition |
| Active Influencer | Willing to tell others, but more important, others listen and act on the influencer’s opinion. |
| Interested | Has a greater intrinsic interest in the product category than the average user. |
| Heavy User | Actually uses or consumes the offering regularly, preferably more than the average user. |
| Loyal | Sticks to one brand when it works. Note, however, that this category could include someone who isn’t loyal because the right offering meeting his or her needs hasn’t yet been created. |
| Lead User | Willing to try new products and offer feedback. In some instances, modifies an offering to suit their own needs; you want lead users to suggest the modifications so you can see how and why they do so. |
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HOW TO FIND INFLUENCERS
They have to be actively recruited.
Ask a customer to take a survey.
Send random surveys to identify good panel participants.
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THREE QUESTIONS TO ASK BEFORE ACTIVATING A PANEL
What results are expected from the influencer panel?
How much are the panel members willing to do?
What’s in it for the panel members?
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SOCIAL MEDIA
Social Networking Sites: Facebook and LinkedIn are used to create communities.
Viral Marketing: The spread of the company’s message (like a computer virus) through the community.
Blogs: A form of online communication that help spread viral marketing messages.
Social media: A catchall phrase for the online channels of communication that build communities
Social media includes social networking sites, blogs, podcasts, wikis, vlogs (video blogs), and other Internet-based applications that enable consumers to contribute content.
Social media spending for marketing purposes doubled in 2008 and continued to rise through 2011 despite the poor economy. In fact, Forester, a respected research company, estimated spending to top over $3 billion in 2014!
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KEY TAKEAWAYS
Customer communities form around social networks, which marketers can use to both promote offerings and gather market information.
Companies create influencer panels that provide insight into effective offerings and provide word of mouth.
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LEARNING OBJECTIVES
Understand the value of customer loyalty.
Distinguish attitudinal loyalty from behavioral loyalty.
Describe the components of a successful loyalty program.
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LOYALTY MANAGEMENT
Early research on loyalty showed that loyal customers were:
Less expensive to market to,
More willing to pay a premium for a particular brand,
More willing to try new products under the brand name,
More likely to recommend the brand to their friends,
More willing to overlook a problem related to the brand.
Loyalty has two dimensions
Behavioral loyalty: The customer buys the product regularly and does not respond to competitors’ offerings.
Attitudinal loyalty: The degree to which the customer prefers or likes the brand.
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LOYALTY PROGRAMS
Data collected from loyalty programs can be useful for designing and improving the company’s offerings.
Cross-Promotion: A method in which two or more groups act together to reach potential customers.
MARKETING EFFORTS THAT REWARD A PERSON OR ORGANIZATION FOR FREQUENT PURCHASES AND THE CONSUMPTION OF OFFERINGS
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POSITIVE EFFECTS OF LOYALTY PROGRAMS
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CRITERIA FOR SUCCESSFUL LOYALTY PROGRAMS
Good Performance by a company.
Responsiveness by a company.
Shared identity among participants.
Clear benefits.
Community development.
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KEY TAKEAWAYS
Customer loyalty is both behavioral and attitudinal. Habitual purchases are a form of behavioral loyalty.
Cause-related marketing can foster attitudinal loyalty among a company’s community of customers, as can loyalty programs.
Loyalty programs can have four positive effects:
Increase the longevity, or lifetime value, of customers
Block competitors’ marketing efforts
Encourage customers to buy related offerings
Accelerate their purchases
Loyalty programs don’t automatically create loyalty among customers, though. Loyalty is created when a company performs well, responds to its customers, identifies its loyal customers, makes the benefits of its loyalty program transparent (obvious), and when the firm builds a community among its customers.
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LEARNING OBJECTIVES
Understand satisfaction and satisfaction strategies.
Design a customer satisfaction measurement system.
Describe complaint management strategies.
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CUSTOMER SATISFACTION
Improving customer satisfaction is a goal sought by many businesses.
Customer satisfaction scores have been relatively stable for the past few years.
A company’s performance on key factors is critical both in terms of the loyalty and satisfaction it generates among its customers.
FEELING THAT A PERSON EXPERIENCES WHEN AN OFFERING MEETS THEIR EXPECTATIONS
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CUSTOMER SATISFACTION STRATEGIES
Two critical ways to improve customer satisfaction
Establish appropriate expectations in the minds of customers.
Deliver on those expectations.
Another customer satisfaction strategy involves offering customers warranties and guarantees
Postpurchase dissonance: A form of dissatisfaction; is more likely to occur when an expensive product is purchased, the buyer purchases it infrequently and has little experience with it and there is a perception that it is a high-risk purchase.
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MEASURING CUSTOMER SATISFACTION
Effective customer satisfaction measures have several components:
Customer’s expectations
Whether the organization performed well enough to meet them
Degree of satisfaction
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COMPLAINT MANAGEMENT STRATEGIES
Verbal terrorists: people who use every Internet site possible to bash a company.
Net promoter score: the number of recommenders an offering has minus the number of complainers.
When a complaint is made, the process for responding to it is as important as the outcome.
A company that outsources its service nonetheless has to make sure that customer complaints are handled as diligently as possible so that customers are not left with a poor impression.
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HANDLING THE COMPLAINT PROCESS
Listen carefully to the complaint.
Acknowledge the customer’s feelings.
Determine the root cause of the problem.
Offer a solution.
Gain agreement on the solution and communicate the process of resolution.
Follow up, if appropriate.
Record the complaint and resolution.
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OFFERING FAILURE
Failures can be attributed to one (or more) of the following four gaps:
The communication gap: Overstating the offering’s performance level, thereby creating unrealistic expectations on the part of customers.
The knowledge gap: Not understanding the customer’s expectations or needs, which then leads a company to create a product that disappoints the customer.
The standards gap: Setting performance standards that are too low despite what is known about the customers’ requirements.
The delivery gap: Failing to meet the performance standards established for an offering.
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KEY TAKEAWAYS
Measuring customer satisfaction is an important element of customer empowerment. But satisfaction alone is a minimal level of acceptable performance. It means that the customer’s expectations were met.
Getting positive word of mouth requires exceeding those expectations. To minimize the number of complaints a company needs an effective process of both handling complaints and understanding their causes so any problems can be corrected.
Because the complaint process itself is subject to complaints, monitoring your firm’s customer satisfaction levels also means you must monitor how satisfied customers are with your company’s complaint handling system.
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LEARNING OBJECTIVES
Apply general ethical principles and concepts to online marketing.
Explain the laws that regulate online and other types of marketing.
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ETHICS
Sugging: Selling under a guise or phony front. While sugging isn’t illegal, it isn’t fair.
Caveat emptor: “let the buyer beware” or “it’s your own fault if you buy it and it doesn’t work!”
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LEGAL REQUIREMENTS
Currently, there are no regulations regarding sugging.
The CAN-SPAM Act prohibits the use of e-mail, faxes, and other technology to randomly push a message to a potential consumer.
Spam: unwanted commercial emails similar to junk mail.
Permission marketing: a term that was created to suggest that marketers should always ask for permission to sell or to offer buyers marketing messages.
Because of trust issues and the overuse of permission marketing, many consumers create dump accounts, or e-mail addresses they use whenever they need to register for something online.
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PRIVACY LAWS
U.S. privacy laws apply to both Internet marketing and other forms of commerce.
The Gramm-Leach-Bliley Act of 1999 requires financial institutions to provide written notice of their privacy policies.
Privacy policies: statements regarding how a company will use and protect a consumer’s private data.
Privacy policies and privacy laws apply to both business customers and individual consumers.
The Uniform Commercial Code (UCC): a group of laws that govern commercial practices in the United States.
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WARRANTY
Expressed warranty: an oral or written statement regarding how the product should perform and the remedies available to the consumer in the event the offering fails.
Implied warranty: an obligation for the seller to provide an offering of at least average quality, beyond any written statements.
A PROMISE BY THE SELLER THAT AN OFFERING WILL PERFORM AS THE SELLER SAID IT WOULD
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PROTECTING YOUR COMPANY
As marketer, you have an obligation to protect your company from consumers who might not have honest intentions.
A bot, which is short for robot, is a kind of program that performs automatic functions online.
Phishing: soliciting personal information in order to steal an identity and use it to fraudulently generate cash.
It is very difficult to protect against phishing, so making sure your customer contact policies protect your customers can also protect them against phishing from someone pretending to be you or your company.
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KEY TAKEAWAYS
Sugging is selling under any phony type of front. It includes posting fake reviews about products online. Sugging damages a seller’s trust among buyers and should never be done.
U.S. laws govern how products can be marketed, both those that are sold electronically and through more traditional channels.
Companies must have permission before they can send you spam, and they have to tell you how they will gather and use your personal information.
Warranties—expressed and implied—are binding no matter how companies deliver them.
Good marketers anticipate less-than-honest activities by individuals and take steps to prevent them.
Bots are online robots that some people use to take advantage of marketers.
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