Customer Equity in CRM
Customer equity is the summation of the customer lifetime value for all the customers of a business. Generally, when spending on customer acquisition is 0, the customer acquisition becomes 0. And when spending on customer acquisition is infinity, the acquisition becomes ceiling rate. The ceiling rate is the upper limit of customer acquisition for businesses. Loyalty Generation in B2CCustomers make purchasing decisions based on perceived value. Customers' perceived value is the difference between the prospective customer’s evaluation of all the benefits and costs of an offering and the perceived alternatives. Customer satisfaction is a person’s feeling of pleasure or disappointment that results from comparing a product or service’s perceived performance to expectations. For a customer to be satisfied with a company, the company must meet the customer’s expectations. And when customers are continually happy with a company, it leads to loyalty. Customer Relationship Management in Services MarketParasuraman et al. suggest that there are different gaps between what customers want and what customers get. This gap is what determines customer satisfaction. Prof. Parasuraman et al. created the SERVQUAL dimension to serve as a measure of service quality. The five factors of SERVQUAL used for measuring service quality are:Reliability | Assurance | Empathy | Responsiveness | Tangibility
Managing Customers’ Defection in B2C
The effects of losing customers are: Reduction in future cash flow, Return of investment of new consumer becomes lower, Increase in servicing cost, The capacity of charging premium price becomes lower, Losing of referrals and Competitors gain more customers.
The steps to managing customers’ defection from a business are:
Finding a mechanism to identify defection, Defining defection.Trying to stop the defection, Understanding why the defectors left the business, Correcting service quality investment, Letting some of the defectors or potential defectors go.
Log in to save your progress and obtain a certificate in Alison’s free Managing Customer Relationships in B2C and B2B Markets online course
Sign up to save your progress and obtain a certificate in Alison’s free Managing Customer Relationships in B2C and B2B Markets online course
Please enter you email address and we will mail you a link to reset your password.