15 MKC1 CH-14 Customer Satisfaction, Loyalty, and Empowerment

What Gramm-Leach-Bliley Act of 1999 requires?

The Gramm-Leach-Bliley Act of 1999 requires financial institutions to provide written notice of their privacy policies.

What is blocker effect

The 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.

What is influencer marketing?

A marketing strategy being used increasingly often is influencer marketing, or targeting people known to influence others so that they will use their influence in the marketer's favor. These influencers are the lead users we discussed in the chapter on designing offerings.

What is implied warranty ?

An implied warranty is an obligation for the seller to provide an offering of at least average quality, beyond any written statements.

What is Buzz ?

Buzz refers to the amount of word of mouth going on in a market. However, in addition to traditional word of mouth, buzz includes blogs, articles, and other information about an offering.

What CAN-SPAM Act prohibits?

CAN-SPAM Act prohibits the use of e-mail, faxes, and other technology to randomly push a message to a potential consumer.

What is cause-related marketing?

Companies that engage in cause-related marketing choose causes that are important to the customer communities in which they operate. American Airlines sponsors the Susan G. Komen Foundation, an organization that is working to cure breast cancer.

What is customer empowerment?

Consumers being able to take control of the marketing activities aimed at them is what customer empowerment is about.

How much are the panel members willing to do?

How much are the panel members willing to do? Companies want to keep their panelists actively engaged, which requires asking how often they want to participate on the panel, as well as giving them the right to "opt out" of a particular activity if they must. In some instances, you may put out a general call for help, such as posting a notice on an online bulletin board that you need volunteers to test a product.

What is Switching costs?

Loyalty programs also affect the longevity of customers by increasing their switching costs. Switching costs are the costs associated with moving to a new supplier. For example, if you are a member of a frequent-flier program, you might put up with some inconveniences rather than switching to another airline.

What is behavioral loyalty?

One dimension of loyalty is behavioral loyalty, meaning that the customer buys the product regularly and does not respond to competitors' offerings.

What is attitudinal loyalty?

The second dimension is attitudinal loyalty, which is the degree to which the customer prefers or likes the brand.

What is communication gap?

The communication gap. Overstating the offering's performance level, thereby creating unrealistic expectations on the part of customers.

what is the delivery gap?

The delivery gap. Failing to meet the performance standards established for an offering.

What is expressed warranty?

The first is an expressed warranty, which is an oral or written statement by the seller regarding how the product should perform and the remedies available to the consumer in the event the offering fails.

What is knowledge gap?

The knowledge gap. Not understanding the customer's expectations or needs, which then leads a company to create a product that disappoints the customer.

What is longevity effect ?

The longevity effect is lengthening the lifetime value of a customer. We discussed customer lifetime value (CLV) in earlier chapters.

What is spreader effect?

The spreader effect refers to the fact that members of a loyalty program are more likely to try related products offered by the marketer. For example, an American Airlines AAdvantage member who also joins the company's Admiral's Club airport lounge creates additional revenue for the airline, as does the member's purchase of a family vacation through American's Vacation services.

what is standards gap?

The standards gap. Setting performance standards that are too low despite what is known about the customer's requirements.

What is cross-promotion marketing?

These individuals could then be offered discounts on trips to Louisville, Kentucky, where the Kentucky Derby is held. Such an offer is called cross-promotion marketing. A cross-promotion can be used to introduce new marketing members to a community; in this case, Lone Star Park is introducing American to the horseracing community. The cross-promotion creates credibility for the new member, just as you are more likely to accept a recommendation from a friend.

What do we want from the influencer panel?

What do we want from the influencer panel? Usually, companies want feedback on new offerings and new marketing communications, as well as active word-of-mouth promotions. Panelists need to know when you are merely testing a new offering versus introducing it to the marketplace. You don't want word of mouth about a new product that isn't yet ready to be sold.

What's in it for the panel members?

What's in it for the panel members? What do they get out of participating? They of course get to try free, new products that might improve their lives—or will one day improve their lives if a company heeds their advice.

What is accelerator effect?

When rats running in a maze get closer to the cheese, they speed up. 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, called the accelerator effect of a loyalty program. In American's AAdvantage program, for example, a member gets "Platinum" status after flying sixty flights or fifty thousand miles.

Two dimensions Loyalty?

behavioral loyalty and attitudinal loyalty.

Who is influencer panel?

the influencers participate regularly in marketing research activities. Another term for this type of community is an influencer panel.