Transcript Review Day 1

Review Day 1
•
•
•
•
Difference between frequency and loyalty
How CRM relates to loyalty
Evolution of marketing 4P 7P 14C
Lessons learned from research on loyalty –
both hotels and restaurants
• Types of customers (see next slide)
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
profitable now
unprofitable future
Cunprofitable now
unprofitable future
Unprofitable
profitable now
profitable future
D unprofitable now
profitable future
Profitable
Customers - Future
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Profitable
B
A
Unprofitable
Customers - Current
Not All Customers Are Equal
ST
Types of Loyalty
True Friends
Butterflies
• Good fit between company’s offerings and
HP
customers’ needs;
•High profit potential
Actions:
•Aim to achieve transactional satisfaction,
not attitudinal loyalty
Milk the accounts as long as they are active
Key challenge is to cease investing soon enough
• Good fit between company’s offerings and
customers’ needs;
•Highest profit potential
Actions:
•Communicate consistently, but not too often
•Build both attitudinal and behavioral loyalty
•Delight to nurture, defend, and retain them
Strangers
Barnacles
• Little fit between company’s offerings and
LP
LT
customers’ needs;
•Lowest profit potential
Actions:
•Make no investments in these relationships
•Make profit on every transaction
• Limited fit between company’s offerings and
customers’ needs;
•Low profit potential
Actions:
•Measure the size and share of wallet; if low
focus on up and cross-selling
If size of wallet small, impose strict cost
controls
From Reinartz and Kumar 2002 Harvard Business Review
Customer
LoyaltyST
and =short
Frequency
Marketing
HP = high profit; LP=
low profit;
term;
LT= long term
(c) Stowe Shoemaker, Ph.D
Review Day 1
•
•
•
•
•
•
•
•
Satisfaction and loyalty
Intent to return, satisfaction, and loyalty
Why customers may be loyal but do not return
Measuring the value of customer
Value of word of mouth
Brands and branding
Survey measurement scales
Business models of hotels and how point
based programs drive current model
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
1. Review with your staff buyer behavior model
2. Review with your staff evolution of
marketing.
3. Have staff take each of the 14C’s and apply it
to their department to see how the
department can move customer to loyalty
4. Discuss frequency versus loyalty with staff
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
5. Discuss components of loyalty and develop
list of things your firm is doing to create
loyalty.
6. Look at each of your customer segments to
determine which cell they belong (see slide
on page 2 and 3). If possible calculate % of
each
7. On surveys, ask questions about overall
satisfaction and overall intent to return
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
8. Cross tab intent to return with satisfaction
9. Add questions to survey that will enable firm
to calculate life time value, WOM (both
positive and negative, etc.)
10.Go through list of 10 guidelines for building
strong brands. Make a list of all the things
your firm does to build its brand.
11.Design “leaky bucket” for your firm by
segment type.
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Review Day 2
• Rosewood Hotels: decision to brand or not to
brand
• Calculate the life-time value of a customer:
importance of limiting defections and its
financial impact
• Importance of asking questions on survey to
measure LVC
• Introduced the Loyalty Circle
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Review Day 2
• Discussed Value and what comprises value
• Discussed the four components of a service
• Importance of “planning your work” and
“working your plan”
• Introduced the Gap Model of Service Quality,
where the GAPS occur and how to close the
GAPS
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
12.Examine your surveys and make sure you
include questions to measure life-time value
and word of mouth
13.Introduce staff to Loyalty Circle to show them
how loyalty can be created
14.Give staff members the survey that pertained
to GAP 2. Discuss results and use 14C’s and
RATER to improve guest experience
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
15.Reword questionnaire in GAP 2 from
customer’s perspective and administer to
your guests. Examine how guests’ and staff
perspectives differ, if at all
16.Investigate the listening posts you have
created around your property. How are they
working? How do you ensure information
works its way “up”
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
17.Examine ways you communicate. Are you
providing consistent message? What does
your guest “see” when they get your e-mail?
18.Review best practices for communication,
which areas need improvement?
19.Use “test and control” groups
20.Give your staff following survey
21.Incorporate slide 11 in all your surveys
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
How Well Are You Doing?
• 1 = Not using strategy at all
• 2 = Using the strategy but have had problems
implementing it
• 3 = Using the strategy but with no noticeable
results
• 4 = Using the strategy and have noticed positive
results
• 5 = Using the strategy and judge it as a highly
effective tactic for maintaining ongoing
communication with customers
From: A Complaint is a Gift
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Strategies
• 1. Train staff to view complaints as a gift ___
• 2. Market the fact that you are looking for
complaints ____
• 3. Evaluate your internal complaint structure ___
• 4. Set up listening posts ___
• 5. Make customer comment forms available ___
• 6. Create staff comment forms to capture
customer complaints ___
From: A Complaint is a Gift
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Strategies
• 7. Let customers complain in private ___
• 8. Set up customer confidants ___
• 9. Do not be satisfied with the first response
your customers give you ___
• 10. Go after the ones that do not respond to your
customer surveys ___
• 11. Randomly ask for feedback ___
• 12. Ask for value and quality ratings ___
• 13. Hang out with your customers ___
From: A Complaint is a Gift
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Scores
•
•
•
•
•
•
•
1.
2.
3.
4.
5.
6.
7.
____
____
____
____
____
____
____
•
•
•
•
•
•
•
8. ____
9. ____
10. ____
11. ____
12. ____
13. ____
TOTAL ______
Your Total/65 = _________
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
Problem Impact Tree
Please indicate if you reported any problems during your visit and
how they were resolved.
No problems experienced . . . . . . . . . . . . . . . . . . . .1 SKIP X
Problems reported and were resolved in a friendly
effective manner . . . . . . . . . . . . . . . . . . . . . . 2
Experienced problems, but didn’t report to staff . … 3
Problems reported and were not resolved in a
friendly, effective manner. . . . . . . . . . . . . . . . . 4
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What to Do When Get Home
22.Examine chart on next page: determine the
percentage of customers in each cell
23.Examine each component of loyalty circle.
Develop list of tactical things firm does to
build loyalty. Also ask, what could be done to
build loyalty
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What are
we
collecting
Where
Who’s
collecting
How
collecting
Customer Loyalty and Frequency Marketing
(c) Stowe Shoemaker, Ph.D
What
From Who
From: A Complaint is a Gift
No Product or Service Failure
Customer does not say
anything
Celebration
Product or Service Failure
Customer does not say
anything
Encourage Complaints
Customer Loyalty and
Frequency Marketing (c)
Stowe Shoemaker, Ph.D
No Product or Service Failure
Customer dissatisfied and
speaks up
Proactive Customer
Education/Research
Product or Service Failure
Customer dissatisfied and
speaks up
Service Recovery