A2 Building and Maintaining Customer Relationships

Building and
Maintaining
Customer
Relationships
Topics Covered
o Relationship Marketing
o Retention Strategies
o Loyalty programs
o Benefits of Relationship Marketing
o Targeting profitable customers
At Your Service Spotlight:

Wine for Dudes
Where customer service is King!
o
o
o
o
o
Full service website

Quarterly newsletter
social networking
Word of mouth marketing
Dudes of Fortune Quiz Challenge
o Personal relationships with customers

Accommodates individual needs
Customized group tours
o Encourages repeat customers
Company merchandise as gifts
Dudes Dollars trip vouchers
Customer service recovery:
wine heals all wounds
Relationship marketing
A form of marketing that attracts customers,
retains them, and enhances their satisfaction.
o Less expensive to attract repeat customers
o Dramatic increases in profits
Spend twice as much gross income
o Enhancing customer satisfaction includes:
Nurturing individual relationships
Making customers feel unique
Making customers feel singled out for attention
Loyalty programs
Customer Relationship
Management Model
Figure 1 (Source: Based on Winer, 2001)
Levels of retention
strategies
Figure 2 (Source: Adapted from Zeithaml and Bitner,

2000)
Industry growth in loyalty programs

o Social media
o Experiential benefits
o Customized reward programs
o Matched benefits across brands
o Coalition model
Corporate-wide
Across brands
o Hybrid approaches
2008-2010 loyalty program

memberships growth in US
Table 1 (Source: Based on Hlavinka and Sullivan, 2011)
Hospitality and tourism

loyalty programs
o Frequent flyer rewards
Repeat customers
Highest fare holders
Elite status customers
o Co-branded credit cards

Issuers pay carriers for miles awarded
Significant income source
o Hotel loyalty programs:
Complimentary meals, internet access
Included in franchise fees
Joint programs for smaller brands, boutique hotels
o Frequent diner programs:

Rewards Cards
Non-financial incentives e.g. Jump the Line perk
Hybrid approaches
Service loyalty classification

scheme
Figure 3 (Source: Adapted from Dick and Basu, 1994)
Snapshot:
Legend Golf & Safari Resort

Getting to the heart of customer relationship management
by focusing on customer preferences.
o Corporate relationships linked to management strategies
o Dedicated guest relations managers and frontline employee
feedback
o Customer Relationship Management (CRM) strategy
o Operation Boat Float (OBF).
o Most Valued Client
o Customer feedback
Attention to unique requirements
Rated response
Benefits of Relationship Marketing

o Customers loyalty incentives:
High perceived value
Get should exceed Give
Rewards for loyalty
o Company benefits:
Higher profits through retaining customers
More purchases overall
More frequent purchases
Lowers operating costs
No acquisition costs
Increases company referrals
Benefits of relationship marketing
Table 2
Targeting profitable
customers
o Building and improving upon traditional segmentation
o Studying loyalty- versus defection-prone customers
Identify profitability bands

Identify customers most likely to remain loyal
Develop overall strategy around these customers
Target with retention strategies
Other customers too costly to retain
Little potential to become profitable
The 80/20 customer pyramid
Figure 4 (Source: Adapted from Zeithhaml and Bitnen,

2000)
Managing loyalty and profitability
Figure 5 (Source: Adapted from Kumar and Rajan, 2009, p. 5)
A taxonomy of casino customer

segments
Figure 6 (Source: Watson and Kale, 2003)
Case Study: Service Excellence at

Sheraton Suites
.What people really remember is the guest experience.
o Service interaction key to customer loyalty
Carefully selected and trained staf
Brand-specific programs
Building World Class Brands
Staf empowerment
Strong service culture
Awards for service
o Relationship marketing
Tailored to each guest
Personable, non-intrusive attention
Its Our Pleasure program
Starwood Preferred Guest program
Loyalty reward point system
Social media monitoring

A2 Building and Maintaining Customer Relationships

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Building and

At Your Service Spotlight:

Full service website

o Personal relationships with customers

Spend twice as much gross income

o Enhancing customer satisfaction includes:

Nurturing individual relationships

Making customers feel unique

Making customers feel singled out for attention

Figure 1 (Source: Based on Winer, 2001)

Figure 2 (Source: Adapted from Zeithaml and Bitner,

Industry growth in loyalty programs

2008-2010 loyalty program

Table 1 (Source: Based on Hlavinka and Sullivan, 2011)

Hospitality and tourism

o Co-branded credit cards

o Frequent diner programs:

Service loyalty classification

Figure 3 (Source: Adapted from Dick and Basu, 1994)

Legend Golf & Safari Resort

Benefits of Relationship Marketing

High perceived value

Get should exceed Give

Rewards for loyalty

Higher profits through retaining customers

More purchases overall

More frequent purchases

Lowers operating costs

Increases company referrals

Benefits of relationship marketing

Identify profitability bands

The 80/20 customer pyramid

Figure 4 (Source: Adapted from Zeithhaml and Bitnen,

Managing loyalty and profitability

Figure 5 (Source: Adapted from Kumar and Rajan, 2009, p. 5)

A taxonomy of casino customer

Figure 6 (Source: Watson and Kale, 2003)

Case Study: Service Excellence at

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