Service marketing part two

ServicesServicesServicesServices
MarketingMarketingMarketingMarketing
(part two)(part two)(part two)(part two)
Erminia Corsi www.marketenergy.info
(part two)(part two)(part two)(part two)

TopicsTopicsTopicsTopics
Day 3 :
Brand and communication
The marketing plan
Customer retention and loyalty
Customer Relationship Management System

How to evaluate marketing investmentsHow to evaluate marketing investmentsHow to evaluate marketing investmentsHow to evaluate marketing investments
Customer base, brand notoriety, sales channels/
local desks represent assets to be valued
when joint ventures, company acquisitions or other
financial operations are in place.
Therefore, marketing investments are not only
sales costs, but costs needed to create patrimonial
value

Branding the companyBranding the companyBranding the companyBranding the company
Branding plays a special role in service companies because strong
brands enable customers to better visualize and understand intangible
products
Brand should be used as the foundation for building trust-based
relationships with customers
studio
professionale per
il business
Brand should communicate values customers hold dear, creating an
emotional connection between the company and the customer
Brand for local utilities should be based on local traditional values

An example : Centrica Corporate ValuesAn example : Centrica Corporate ValuesAn example : Centrica Corporate ValuesAn example : Centrica Corporate Values
Our valuesOur valuesOur valuesOur values
Our values are the core of our corporate philosophy.
All our actions are based on these fundamental values and
beliefs, which link our vision to our business principles.
Source: www.centrica.com

Passion for customersPassion for customersPassion for customersPassion for customers
This value is central to the way we work. We have an ethosethosethosethos of delivering
outstanding customer service. We must be able to anticipate our customers' needs
and correct any errorscorrect any errorscorrect any errorscorrect any errors promptly. We must give value for money, and deliver
efficient and effective products and services.
PridePridePridePride
Pride comes from the satisfaction of our customers and from delivering high-quality
products and services. We're proud of our staff and their achievements, and we
products and services. We're proud of our staff and their achievements, and we
recognise and reward success.
TrustTrustTrustTrust
Trust is at the heart of our relationships with customers. Trust means doing what
we say and acting with integrity.acting with integrity.acting with integrity.acting with integrity. We demonstrate trust by respecting andrespecting andrespecting andrespecting and
empowering our employeesempowering our employeesempowering our employeesempowering our employees. Building trust will help us develop strong future
relationships with our stakeholders.
Source: Centrica Web Sites

ChallengeChallengeChallengeChallenge
We are constantly striving for continual improvement; we are neverwe are neverwe are neverwe are never
satisfiedsatisfiedsatisfiedsatisfied. We engage constructively with advocates and critics from within
and outside the company. We do this to maintain our competitive edge
and deliver consistently outstanding shareholder returns
SupportSupportSupportSupport
We support employees seeking to meet and own challenges. We foster
We support employees seeking to meet and own challenges. We foster
teamworking and knowledge sharing, and give our employees the tools
and training they need to do their job well.

Centrica's vision is to be
a leading
supplier of essential
services in our
chosen markets.
Our distinctive strategy
is to create
value for shareholders.
This is at the heart of
everything we do.
Welcome to Centrica.Welcome to Centrica.Welcome to Centrica.Welcome to Centrica.
Source: Centrica Web Sites

The marketing communication mixThe marketing communication mixThe marketing communication mixThe marketing communication mix
PersonalPersonalPersonalPersonal
CommunicationsCommunicationsCommunicationsCommunications AdvertisingAdvertisingAdvertisingAdvertising Sales PromotionSales PromotionSales PromotionSales Promotion Publicity andPublicity andPublicity andPublicity and
Public RelationsPublic RelationsPublic RelationsPublic Relations
InstructionalInstructionalInstructionalInstructional
MaterialsMaterialsMaterialsMaterials
CorporateCorporateCorporateCorporate
DesignDesignDesignDesign
SellingSellingSellingSelling
CustomerCustomerCustomerCustomer
ServiceServiceServiceService
Training
Broadcast
Print
InternetInternetInternetInternet
Coupons
Gifts
Price
Press
Releases
Press
Conferences
Special
Web SitesWeb SitesWeb SitesWeb Sites
ManualsManualsManualsManuals
BrochuresBrochuresBrochuresBrochures
BillsBillsBillsBills
VehiclesVehiclesVehiclesVehicles
EquipmentEquipmentEquipmentEquipment
Training
TelemarketingTelemarketingTelemarketingTelemarketing
Word of mouthWord of mouthWord of mouthWord of mouth
InternetInternetInternetInternet
Direct Mail
Price
Promotions
Special
Events
Sponsorship
Trade shows
Exhibitions
Media-Initiated
Coverage
BrochuresBrochuresBrochuresBrochures
Video/
Audiocassettes
Voice MailVoice MailVoice MailVoice Mail
EquipmentEquipmentEquipmentEquipment
Stationary
UniformsUniformsUniformsUniforms

Creating/Planning the Service ProductCreating/Planning the Service ProductCreating/Planning the Service ProductCreating/Planning the Service Product
Starting competition influences operational
procedures to create/plan new services:
strong customer focus should be maintained at all
times
times
product management and operational
management should work in strong cooperation

market and competitive analysismarket and competitive analysismarket and competitive analysismarket and competitive analysis : should address each of the
markets in which the firm is involved or thinking of entering
customer portfolio (customer size, profile and value)
competitors (product line, brand reputation, marketing strategy
and positioning)
resource allocation analysisresource allocation analysisresource allocation analysisresource allocation analysis : actual resources and additional
resources required to address new functionalities and/or
supplementary services – equipment, information technology, human
resources

Corporate objectives
and resources
Market and
competitive
analysis
Resource
allocation
analysis
Marketing Assets
Statement:
•Customer Portfolio
•Market Knowledge
•Product Line
•Positioning Strategy
Operating Assets Statement
•Physical Facilities
•Equipment
•Information Technology
•Human Resources
Service delivery process
•Positioning Strategy
•Reputation of Brand
Service Marketing Concept
Benefits to Customer
• Core Product
• Supplementary Services
• Service Level and Style,…
User Costs
• Price
• Time
• Mental Effort
• Physical Effort,…
•Human Resources
•Alliances and Partnerships
•Cost Structure
Service Operations Concept
Nature of Processes
• People Processing,
• Information Processing
Geographical area/constraints
• Area Served
• Infrastructure availability
Scheduling
Facilities Design and Layout
Human Resources
Source: Service Marketing (C.Lovelock, J. Wirtz)

Planning, a management toolPlanning, a management toolPlanning, a management toolPlanning, a management tool
Planning is answering, with details, to some
crucial questions:
Where are we today? (current situation)
Where want we to go? (objectives)
How want we to go there? (policies)
Which resources/tools can we count on?
Which resources/tools can we count on?
(budgeting)
When and how will we use those resources?
(programming)
How will we check the way? (controlling)

The Market PlanThe Market PlanThe Market PlanThe Market Plan
The objectives of a Market Plan should be:
The market plan is the document which describes and plans the
actions needed to achieve the expected results.
The market plan is the tool to check periodically where you are, where
you should be, what to do if you are not in line with expected progress
quantifiable,
specifics,
scheduled on a timing basis,
challenging but achievable at the same
time

The Market PlanThe Market PlanThe Market PlanThe Market Plan
A Market Plan covers following aspects:
market :
target market,
reference competitors,
target market share
finance and economy :
investments - sales and marketing, infrastructure, …
investments - sales and marketing, infrastructure, …
expected revenues
technology :
technical requirements
sales organisation :
direct sales vs. indirect sales
new sales channels (Internet, call center,others,…)

CustomerCustomer
OrientedOriented
1
Top Management
“committed”
to the customer base
2
Regular customer and
market feedback
analysis
5
Managing human
CustomerCustomerCustomerCustomer orientedorientedorientedoriented companiescompaniescompaniescompanies
OrientedOriented
CompaniesCompanies
analysis
Managing human
resources positive
customer attitude
3
Competitive
Benchmarking4
Organization and
processes customer
oriented

Relational MarketingRelational MarketingRelational MarketingRelational Marketing
Marketing focus shouldn’t be the product/service, but
the customer, and the relationship the company can
define with the customer base
The customer base is an important asset, to be
The customer base is an important asset, to be
appropriately made valued
Retaining customers costs much less than acquiring a
new one

The knowledge of the customer as a key competitive factorThe knowledge of the customer as a key competitive factorThe knowledge of the customer as a key competitive factorThe knowledge of the customer as a key competitive factor
PaymentsPaymentsPaymentsPayments ContractsContractsContractsContracts
RequestsRequestsRequestsRequests
Customer:Customer:Customer:Customer:
who is?who is?who is?who is?
BillingBillingBillingBilling
MeteringMeteringMeteringMetering
ExpectationsExpectationsExpectationsExpectations
RequestsRequestsRequestsRequests
for servicesfor servicesfor servicesfor serviceswho is?who is?who is?who is?
How many in the family?How many in the family?How many in the family?How many in the family?
What they do?What they do?What they do?What they do?
What they wishWhat they wishWhat they wishWhat they wish
us to do?us to do?us to do?us to do?

4Customer data collection
and analysis
Segmentation
Interazione
Customer
relaionship
Relationship
Marketing
RelationshipRelationshipRelationshipRelationship mmmmarketingarketingarketingarketing
To build a relationship marketing means to define a mutual recognition and
knowledge between the parties
4Segmentation
4Tailored Services
4One-to-one marketing
Mass
Market
Target
Marketing
Information
Low HighCustomer
Focus:
Tailored
Services
Customer
relaionship

Increased ProfitIncreased ProfitCustomer RetentionCustomer Retention
Longer customer lifeLonger customer life
Deeper customerDeeper customer
A. Reduce costs
(sales and
operations)
B. Primium Price
CustomerCustomerCustomerCustomer rrrretentionetentionetentionetention eeeeffectsffectsffectsffects
Increased ProfitIncreased Profit
and Valueand Value
Customer RetentionCustomer Retention Deeper customerDeeper customer
presencepresence
ReferencesReferences
C. Increased
customer purchases/
transactions
D. Better Company
Image

Profit from Price
Premium
Profit from
References
Profit from Reduced
Operating Costs
CustomerCustomerCustomerCustomer loyaltyloyaltyloyaltyloyalty benefitsbenefitsbenefitsbenefits
Loyal customers generates an ongoing stream of profits
YearYear
(Source : Reichheld and Sasser)
0 1 2 3 4 5 6 7
Profit from
Increased Usage (*)
Base Pofit
Sales costs
(*) often not applicable to public services

TheTheTheThe ccccustomerustomerustomerustomer ssssatisfaction/atisfaction/atisfaction/atisfaction/lllloyaltyoyaltyoyaltyoyalty rrrrelationshipelationshipelationshipelationship
60
80
100
Zone of IndifferenceZone of IndifferenceZone of IndifferenceZone of Indifference :
Zone of affectionZone of affectionZone of affectionZone of affection
Customers do not
look for service
alternatives:
20
40
2 3 4 51
Very
Dissatisfied
Dissatisfied Neither Satisfied
Nor Dissatisfied
Satisfied Very satisfied
Zone of DefectionZone of DefectionZone of DefectionZone of Defection: customers will switch unless
switching costs are high or there are no
alternatives
Zone of IndifferenceZone of IndifferenceZone of IndifferenceZone of Indifference :
Customers are wiilling to
switch if they find a
better alternative
(Source:Jones and Sasser)

TheTheTheThe wwwwheel ofheel ofheel ofheel of lllloyaltyoyaltyoyaltyoyalty
1.1.1.1. Build aBuild aBuild aBuild a
FoundationFoundationFoundationFoundation
For LoyaltyFor LoyaltyFor LoyaltyFor Loyalty
-Segment the market to
match customer needs
and firm capability
-Be selective:focus on customers
who fit the core value proposition
-Manage the customer
base via effective
tiering of service
3.Reduce3.Reduce3.Reduce3.Reduce
Churn DriversChurn DriversChurn DriversChurn Drivers
Monitor churningMonitor churningMonitor churningMonitor churning
customerscustomerscustomerscustomers
Address key churn driversAddress key churn driversAddress key churn driversAddress key churn drivers
-proactive retention measures
-reactive rtention measures
Put effective complaintPut effective complaintPut effective complaintPut effective complaint
handling and servicehandling and servicehandling and servicehandling and service
recoveryrecoveryrecoveryrecovery
EnabledEnabledEnabledEnabled
throughthroughthroughthrough::::
CustomerCustomerCustomerCustomer
LoyaltyLoyaltyLoyaltyLoyalty
tiering of service
-Deliver quality service
2.2.2.2. Create Loyalty BondsCreate Loyalty BondsCreate Loyalty BondsCreate Loyalty Bonds
Build higherBuild higherBuild higherBuild higher----level bonds:level bonds:level bonds:level bonds:
-Social
-Customization
-Structural
Give loyalty rewardas:Give loyalty rewardas:Give loyalty rewardas:Give loyalty rewardas:
-Financial
-Nonfinancial
-Higher tier service levels
-Recognition and
application
Deepen theDeepen theDeepen theDeepen the
relationshiprelationshiprelationshiprelationship :
-Cross.selling
- Bundling
recoveryrecoveryrecoveryrecovery
Increase switchingIncrease switchingIncrease switchingIncrease switching
costscostscostscosts
-Frontline staff
account
-Managers
Membership
programs
-CRM
systems
Source: Services Marketing
(C. Lovelock J. Wirtz)

LoyaltyLoyaltyLoyaltyLoyalty----rrrrewardewardewardeward pppprogramrogramrogramrogram oooobjectivesbjectivesbjectivesbjectives
Increase service purchases
Support cross-selling/up selling programs
Facilitate retention actions
Reduce operating costs
Reduce operating costs
Support relational marketing (going deeply into customer
knowledge and behaviour)

LoyaltyLoyaltyLoyaltyLoyalty----rrrrewardewardewardeward pppprogramrogramrogramrogram oooobjectivesbjectivesbjectivesbjectives
Loyalty reward programs are tools to give consistency to intangibility
Reward benefits should be in line with brand values
Marketers should focus on loyalty programs that directly support the
Marketers should focus on loyalty programs that directly support the
value proposition
To what extent are customers loyal to the core service (or brand) rather
than to the loyalty program itself?

How buyers value rewardsHow buyers value rewardsHow buyers value rewardsHow buyers value rewards
The cash value of the redemption reward
The range of choice among rewards
Be sure that the amount of use required to obtain an award is
Be sure that the amount of use required to obtain an award is
coherent with effective usage for any given customer
The psychological benefits of belonging to the program and
accumulating points

Initiative and company: Enel Club – Enel Distribuzione
Reserved to :
Customers who pay with direct charge on bank
account or with credit card
Subcsription :
Through web, call center, mail sending the
wellcome kit at customers’ home
LoyaltyLoyaltyLoyaltyLoyalty ccccards: some examplesards: some examplesards: some examplesards: some examples
Services included:
Everything to include
family life and free time:
house equipments,
concerts, cinema, books,
travels, museums,..
Notes:
Requests are based more on services than on
products,mainly related to free time.
Customer identification is through the “Service
Card”, to which are connected services.
(source SINT SpA)

Inititive and company :
“AEM Casa + AEM TORINO DISTRIBUZIONE” home
assistance 24h
Time : yearly
Reserved to :
Customers of “AEM TORINO DISTRIBUZIONE”
leaving in Torino (town and district) with a
contract for energy supply.
LoyaltyLoyaltyLoyaltyLoyalty ccccards: some examplesards: some examplesards: some examplesards: some examples
Subscription:
Filling the subscription form at the
insurance policy sent to all customers of
“AEM TORINO DISTRIBUZIONE”
Annual fee 33 Euros, distributed in the
electricity bill during the year
Contents:
• Fast home assistance
• Civil Liability on private life
• Discounts and other facilities in
the shops connected with the
card network
• 3 hours local calls free of charge
(source SINT SpA)

What is “CRM”?What is “CRM”?What is “CRM”?What is “CRM”?
CustomerCustomerCustomerCustomer - a focus on the individuals and
businesses who buy your services
RelationshipRelationshipRelationshipRelationship - the nature of how you interact with them
ManagementManagementManagementManagement - an attempt to direct the course of that relation
to your benefit
(source Logica Consulting)

Setting Business Strategy
Value
Proposition
BrandingMarket Strategy
Planning the Enterprise
Market Analysis Business CaseVision
DevelopingDevelopingDevelopingDeveloping ccccustomerustomerustomerustomer rrrrelationshipelationshipelationshipelationship mmmmanagementanagementanagementanagement ssssystemsystemsystemsystems
Modelling the Approach
CRM Strategy
Business
Process Map
IT Strategy
Planning the Delivery
Organisational
Model
Key
Performance
Indicators
IT Architecture
(modified from original Logica Consulting)

Service marketing part two

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (19)

Destacado

Destacado (6)

Similar a Service marketing part two

Similar a Service marketing part two (20)

Último

Último (20)

Service marketing part two