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Chapter Four

Chapter Four. Relationship/Loyalty Marketing. Questions to Motivate Discussion. Name two products or services to which you consider yourself extremely loyal. What has produced that loyalty? How frequently do you buy this product or service?

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Chapter Four

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  1. Chapter Four Relationship/Loyalty Marketing

  2. Questions to Motivate Discussion • Name two products or services to which you consider yourself extremely loyal. • What has produced that loyalty? • How frequently do you buy this product or service? • What do you tell your friends about this product or service? • What do you tell your family?

  3. Relationship/Loyalty Marketing Is…. • “…an ongoing process of identifying and creating new value for individual customers for mutual value benefits and then sharing the benefits from this over a lifetime of association.”

  4. Frequency . . . Focusing on Behavior When customers give you a greater share of their transactions than they might have without the program, usually in exchange for accumulating miles, points, or other surrogate discounts. You ask:Aren’t we quibbling here, isn’t that loyalty?

  5. Loyalty . . . Focusing on Emotion When the customer feels so strongly that you can best meet his or her relevant needs, your competition is virtually excluded from the considered set, and the customer buys almost exclusively from you — referring to you as “their restaurant” or “their hotel.” Winning maximum share of heart, mind, and wallet.

  6. The Benefits of Real Loyalty • The customer focuses on your brand, offers, and messages to the exclusion of the competition. • Price is no longer the dominant consideration, but one component in the larger value proposition.

  7. The Benefits of Real Loyalty (cont.) • Loyalty provides critical inoculation. • Competitive offers face a higher hurdle. • The customer becomes more forgiving—goodwill equity • Loyalty begets loyalty

  8. Life-Time Value of a Customer • Definition: • The net profit you will receive from transactions with a given customer during the time this customer continues to buy from you • In today’s dollars/Euro/Yen

  9. Complaints Are… • Inevitable • Healthy • Opportunities • Marketing tools • Advertising

  10. Past Lip service about treating customers better No customization Complaints not processed Customers not part of development Focus on gaining new customers, not retention Future Work with the negative and focus on the positive Translate guest expectation into operational change The Past and Future of Relationship/Customer Loyalty Marketing

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