Loyal customer, yes we are!

“Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value” (pp. 5 Parvatiyar & Sheth, 2001).


The customer relationships process


It is an interchangeable that the terms customer relationship management and relationship marketing are used (Parvatiyar & Sheth, 2001). The customer relationship management or what it is called ‘CRM’ is valuable to company growth. It is an approach using the information technology to storage company’s customers individually so that the marketers can benefits from The customers’ purchase history as well as psychographic and physiographic segmentation since they are the vital tools for marketers to forecast and devise either short term or long term business plan to complement with customers’ retention as well as its company’s growth strategy (Peppers & Rogers, 1993).


CRM was defined as “an integrated effort to identify, maintain, and build up a network with individual consumers and to continuously strengthen the network for the mutual benefit of both sides, through interactive, individualized and value added contacts over a long period of time” (p.44 Jackson, 1985).


As mentioned in class that a good relationship always starts with a good fit between company and its client; hence, it is essential for company to know whom should they serve for especially luxury brands because they are preserved in a niche market where NOT everyone is able to reach. As a result, the process of customer selectivity helps company targeting and narrowing on individual they should spend time and money on. Therefore, the company should organize a proper marketing program and be able to tailor each marketing practice to appropriate customers in order to serve the best to create mutual value (Parvatiyar & Sheth, 2001).


The customer relationship levels are categorized to four stages. Most valuable to poor-relationship customers respectively: platinum, gold, iron and lead. Customer tiers is believed to be beneficial to the market research in order to make project planning easier (Zeithaml, Rust & Lemon, 2001). The platinum accounts is the most essential in the customer tiers because platinum customers are willing to try new service more than any other customer tiers. They are heavy users, less price-sensitive. Gold accounts is similar to platinum accounts except from the fact that they are more price-sensitive. Iron accounts seek for lowest price while lead account generates the lowest revenue to the company but their required of service level is the same as iron (Lovelock & Wirtz, 2007).

The cost of marketing program is usually more expensive when it comes to attracting new customers. Therefore, the company should focus to maintain its exiting clienteles satisfaction and retention. Loyalty drivers are what make customers return to the preferred brand or in the other hand, just stop buying the product. In class, we have discussed about what makes customers loyal to a brand in the luxury category, what are drivers and how can a luxury brands increase their loyalty. Then we came up with the whole idea that the company should be able to provide a positive experience to client’s taste. The satisfactory service is the key to steal customers’ heart because sales persons from many luxury brands are arrogant and look down on customers nowadays.


Below is the wheel of loyalty.

In the last stage, the company should monitor customers’ complaint and consider what would be the factors and why others do not. When the company resonate the complaints, an effective service recovery is the solution to maintain its existing clients because it would be too outrageous to any companies taking a risk when customers’ expectation fails. Therefore, service recovery strategies should be provided at all time in order to deal with different clients in varying situations. The company should plan an implementation recovery practices into two stages; the program before the actual problem emerges and the tactic to resolve after the problem emerges. The employee must be able to make a fast decision-making and response to the complaint. By this, the company has to provide the front-line employees who empower a decision-making equipped with well-trained capability. The employees must show empathy, apology, own the problem, fix the problem, provide assurance that the problem will be sorted out and fixed as well as provide compensation should this be an appropriate discipline.


When service encounter is unsatisfied, customers either take some actions or no actions or both by complaining to service firm, third party, taking legal action, switching to other brands or spreading a negative WOM. Hence, it is a disgraceful threat for company to produce a bad reputation. And what could possibly make customers annoyed enough to complain? There are for example wait times, misunderstanding and most importantly, personnel.


However, the culture also affects attitudes towards complaining i.e. individualism, masculinity and long-term orientation. For instance, a long-term orientation people might be in higher expectation about tangibility then any other type of customers. Therefore, the sales person should be able to present the service which satisfy them.


Bibliographies:


Parvatiyar, A. and Sheth N. J. (2001). ‘Customer Relationship Management: Emerging Practice, Process, and Discipline’ Economic and Social Research, 3 (2) pp. 1-34.


Zeithaml, A.V., Rust, T.R. and Lemon, N.K. (2001). ‘The Customer Pyramid: Creating and Serving Profitable Customers’ California Management Review, 43 (4) pp.127-128.


Lovelock, C. and Wirtz J. (2007). Services Marketing People, Technology, Strategy (6th edn), Singapore: Prentice Hall.


Peppers, D. and Rogers, M. (1993). The One to One Future: Building Relationships One Customers at a Time, New York: Doubleday.


Jackson, B.B. (1985). Winning and Keeping Industrial Customers: The Dynamics of Customer Relationships, Lexington, MA: D.C. Heath.