Building Customer Satisfaction Through Quality, Service, & Value

Building Customer Satisfaction Through Quality, Service, & Value

Otterbein CollegeOtterbein College

Winter 2000Winter 2000

04/19/232-2

Chapter ContentChapter Content

• Define value & satisfaction - understand Define value & satisfaction - understand how to deliver themhow to deliver them

• The nature of high-performance The nature of high-performance businessesbusinesses

• How to attract & retain customersHow to attract & retain customers

• Improving customer profitabilityImproving customer profitability

• Total quality managementTotal quality management

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Image valueImage value

Personnel valuePersonnel value

Services valueServices value

Product valueProduct value

Totalcustomer

value

Totalcustomer

value

Monetary costMonetary cost

Time costTime cost

Energy costEnergy cost

Psychic costPsychic cost

Totalcustomer

cost

Totalcustomer

cost

Customerdelivered

value

Customerdelivered

value

Determinants of Customer Delivered Value

Determinants of Customer Delivered Value

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...a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.

Satisfaction is...Satisfaction is...

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Resources Organizationand

aligning...

ProcessesBy improving critical business...

Stake-holders

Set strategies to satisfy key...

High Performance BusinessHigh Performance Business

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Mar

gin

Margin

Primary Activities

Su

pp

ort

Act

ivit

ies

Serv-ice

InboundLogistics

Opera-tions

Out-bound

Logistics

Market-ingand

sales

Procurement

Technology Development

Human resource management

Firm infrastructure

The Generic Value ChainThe Generic Value Chain

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Competition is between Competition is between networksnetworks, not companies., not companies.The winner is the company with the better network.The winner is the company with the better network.

Delivery

Sears(Retail)Sears

(Retail)Levi’s

(Apparel)Levi’s

(Apparel)

Order

Delivery

Order

CustomerCustomer

Delivery

Du Pont(Fibers)Du Pont(Fibers)

Order

Delivery

Order

Milliken(Fabric)Milliken(Fabric)

Levi Strauss’ Value-Delivery Network

Levi Strauss’ Value-Delivery Network

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Satisfied Customers:Satisfied Customers:

• Are loyal longerAre loyal longer

• Buy more (new products & upgrades)Buy more (new products & upgrades)

• Spread favorable word-of-mouthSpread favorable word-of-mouth

• Are more brand loyal (less price Are more brand loyal (less price sensitive)sensitive)

• Offer feedbackOffer feedback

• Reduce transaction costsReduce transaction costs

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Manycustomers/distributors

Mediumnumber ofcustomers/distributors

Fewcustomers/distributors

AccountableProactivePartnership

Proactive Accountable Reactive

Accountable Reactive Basic orreactive

Highmargin

Mediummargin

Lowmargin

Levels of Relationship MarketingLevels of Relationship Marketing

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Inactive orex-customers

PartnersAdvocatesClientsRepeat

customersFirst-timecustomers

Suspects

Prospects

Disqualifiedprospects

Customer DevelopmentCustomer Development

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P1

Highlyprofitableproduct

P2Profitableproduct

P3Losingproduct

P4Mixed-bag

product

Products

++

+High profitcustomer

+

-Mixed-bagMixed-bagcustomercustomer

+

--

Losingcustomer

C1 C2 C3

Customers

Customer/Product Profitability Analysis

Customer/Product Profitability Analysis

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Valu

e cr

eatio

n

Competitive advantage

Internal operations

ProfitProfitProfitProfit

The Profit TriangleThe Profit Triangle

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QualityQuality

• Quality is the totality Quality is the totality of features and of features and characteristics of a characteristics of a product or service product or service that bear on its that bear on its ability to satisfy ability to satisfy stated or implied stated or implied needs.needs.

#1

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Next...Next...

Chapter 3Chapter 3Winning Markets:Winning Markets:

Market-Oriented Strategic PlanningMarket-Oriented Strategic Planning