4.5 Chapter Summary
Service and relationship marketing continues to evolve in the digital age. This chapter highlights the shift from mass media to a customer-focused approach, emphasizing electronic customer relationship management (e-CRM). Key points include the importance of technology in personalized interactions, leveraging customer data for profiling, and the cost-effectiveness of retaining existing customers. The discussion covers CRM software’s role in centralizing information and automating sales cycles, along with the changing landscape of customer communication. Loyalty and customer satisfaction are key focuses, with strategies like cause-related marketing highlighted for building and sustaining customer loyalty. Overall, the text underscores the vital role of service and relationship marketing in today’s digitally connected world.
Review Questions
- Sales-force automation uses CRM software to manage sales cycles. Consider how this may impact business. How do you think businesses managed this type of data before CRM software existed?
- Should a company be happy or concerned if most customers are satisfied?
- Why have customer satisfaction scores remained relatively steady over the past few years?
- What are the desired outcomes, from a marketer’s perspective, of a complaint management process?
- How would marketing management use customer satisfaction survey results?
- What are the benefits of having loyal customers? Why or how do those benefits occur?
- What is the difference between loyalty and loyalty programs?
- How can you create loyalty without having a loyalty program?
Key Terms
Accelerator Effect: Like rats in a maze, consumers speed up or accelerate, purchases when they are about to reach a higher award level in a loyalty program.
Attitudinal loyalty: Is the degree to which the customer prefers or likes the brand.
Behavioural loyalty: The customer buys the product regularly and does not respond to competitors’ offerings.
Blocker Effect: Is related to switching costs. The blocker effect works this way: The personal value equation of a loyalty program member is enhanced because he or she doesn’t need to spend any time and effort shopping around. And because there is no shopping around, there is no need for the member to be perceptive to competitors’ marketing communications. In other words, the member of the program “blocks” them out. Furthermore, the member is less deal-prone, or willing to succumb to a special offer or lower price from a competitor.
Cause-related marketing: Can foster attitudinal loyalty among a company’s community of customers. Companies that engage in cause-related marketing choose causes that are important to the customer communities in which they operate.
Communication Gap: Overstating the offering’s performance level, thereby creating unrealistic expectations on the part of customers.
CRM software: Enables businesses to manage all customers and potential leads a centralized place.
CRM: Is about managing customer relationships.
Cross-promotion marketing: Can be used to introduce new marketing members to a community. Companies that engage in cause-related marketing choose causes that are important to the customer communities in which they operate.
Customer Satisfaction: The feeling that a person experiences when an offering meets his or her expectations.
Customer-facing personnel: Employees who meet and interact with customers.
Deal-prone: Willing to succumb to a special offer or lower price from a competitor.
Delivery Gap: Failing to meet the performance standards established for an offering.
Electronic customer relationship management (e-CRM): Uses technology in several ways to cement CRM into how organizations conduct themselves.
Knowledge Gap: Not understanding the customer’s expectations or needs, which then leads a company to create a product that disappoints the customer.
Longevity Effect: Lengthening the lifetime value of a customer.
Loyalty programs: Are marketing efforts that reward a person or organization for frequent purchases and the consumption of offerings.
Net promoter score: Is the number of recommenders an offering has minus the number of complainers (Reicheld, 2006)—the more positive the score, the better the company’s performance.
Rapport: Is a relationship or connection you build with others.
Responsiveness: How well a company can take customer information (such as complaints) and alter what they do to satisfy the customer.
Spreader Effect: The fact that members of a loyalty program are more likely to try related products offered by the marketer.
Standards Gap: Setting performance standards that are too low despite what is known about the customers’ requirements.
Switching Costs: The costs associated with moving to a new supplier.
Verbal terrorists: People who use every Internet site possible to bash a company.
Web analytics tools: Gather a wealth of data that can inform customer relationships, from search keywords used to reach a website to navigation paths on a website.
