services marketing

package

-conveys expectations -influences perceptions

critical importance of service employees

They are the service. They are the organization in the customer's eyes. They are the brand. They are marketers.

service recovery

actions taken by an organization in response to a service failure

the first act

firms focus on attracting customers

the second act

firms focus on keeping customers

core service provision

service foundations built upon delivery of excellent service

why is it cost effective to have loyal customers?

it is 6-7 times more expensive to market to new customers. loyal customers are a strong influencer to get new prospects to try your product

why a good guarantee works

forces company to focus on customers, sets clear standards, generates feedback, forces company to understand why it failed, builds "marketing muscle"

loyal customers provide..

honest, quality feedback. they don't hesitate to provide negative feedback because they want to see your brand thrive and serve them better

how does customer loyalty insulate your business from price competition?

in times of rising costs and inflation, commitment towards your brand helps retain customers regardless of lower competitor prices

human behavior

influenced by the physical setting in which it occurs

unhappy customers who don't complain

9% repurchase intention

According to the _____, while advertising, sales and promotions pour profits into your company, there will always be some customer defection, which has the potential to grow larger.

Bucket Theory

How would you describe the sustainability of competitive advantage in the acquaintance stage of the customer relationship evolution?

Generally low with some variation on how the competition creates unique value

unhappy customers who do complain

complaint not resolved: 19% repurchase intention complaint resolved: 52% repurchase intention complaint resolved quickly: 82% repurchase intention

goal of relationship marketing

keeping and improving relationships with current customers, moving them up the evolution ladder

iron

essential customers who provide volume needed to utilize the firm's capacity but their spending, loyalty, and profitability are not substantial enough for special treatment

signs, symbols, and artifact

explicit or implicit signals to communicate the firms image

socializer

facilitates interaction between: -customers and employees -customers and fellow customers

facilitator

facilitates the flow of the service delivery process -provides info -facilitates the ordering process -facilitates service delivery

toward a retention

relationship focus

customer behavior benefits for firms

-strong word of mouth -customer voluntary performance -social benefits to other customers -mentors to other customers

confidence benefits for customers

-trust -confidence in provider -reduced anxiety

effective service guarantee

-unconditional -meaningful -easy to understand and communicate -easy to invoke and collect

customers recovery expectations

-understanding and accountability -fair treatment

switching barriers (because they have to)

-customer inertia -switching costs

human resource management benefits for firms

-easier jobs for employees -social benefits for employees -employee retention

social benefits for customers

-familiarity -social support -personal relationships

economic benefits for firms

-increased revenue -decreased marketing and admin costs -regular revenue stream

why are loyal customers a good marketing tool?

-more inclined to share positive experience -help build your brand -more likely to recommend to friends -reinforce your brand to customers who are new and unfamiliar with your brand

special treatment benefits for customers

-special deals -price breaks

building the customer relationship

Communicate Frequently Offer Customer Rewards Hold Special Events Build Two-way Communication Enhance your Customer Service Launch Multi-cultural Programs Visit the Trenches

support processes

all the activities carried out by individuals and units within the company who are not contact employees

physical evidence

all the tangibles that customers are exposed to that can influence their quality perceptions

service blueprints

allow all members of the organization to visualize an entire service and its underlying support processes, providing common ground from which critical points of customer contact, physical evidence, and other key functional and emotional experience clues can be orchestrated

value =

customers are more likely to stay in a relationship when the "gets" exceeds the "gives"

lead

customers who are costing the company money. demand more attention than they are due given their spending and profitability and are sometimes problem customers - complaining about the firm to others and tying up the firm's resources.

service recovery paradox

customers who experience a service failure followed by excellent service recovery are more likely to repurchase than if the service failure hadn't occurred at all

why is it easier to sell to loyal customers?

loyal customers are more willing to try new products and explore recommendations

platinum

most profitable customers, heavy users of the products, not overly price sensitive, willing to invest and try new products, committed customers

ambient conditions

music, scent, color

gold

profitability not as high because the customers want price discounts that limit margins or are not as loyal. heavy users who minimize risk by working with multiple vendors.

service failure

service performance that falls below a customer's expectations in such a way that leads to customer dissatisfaction

differentiator

sets provider apart from competition in the mind of the consumer

spatial layout and functionality

size and shape of furnishings and their placement, ability of those items to facilitate performance

servicescape

the actual physical facility in which the service is performed, delivered, and consumed

attention grabbing

to make the business stand out from competing businesses and to attract customers from target segments

message creation

to use symbolic clues to communicate with the intended audience about the distinctive nature and quality of the service experience

from an acquisition

transaction focus

effect creation

using colors, textures, sounds, scents, and spatial design to create or heighten an appetite for certain goods, services or experiences

most powerful channel of marketing

word-of-mouth

if you are ROTten..

you will have more customers than you can handle and you can fire the bottom 20% of your customer base every year