Archive for Customer Loyalty

Organizations and Types of Relationships

Posted in Consumer Behavior, CRM, eMarketing, Management with tags , , , , , , , , on December 19, 2011 by Consultant
Organizations today live in highly dynamic environments. Essentially the existence and growth of the business is dependent upon several external and internal factors such as highly segmented geographical markets, aggressive competition and shorter life cycle. These and many more factors exert a lot of pressure on the Organizations to innovate both in terms of its product offering as well as in its organizational development and ways of conducting business. Revenue and profits do form the primary basis of its business transactions. However in the long term growth perspective Organizations have got to be able to manage both external and internal relationships on the basis of the values and culture on which it is founded.

Share Holders

Gone are the days when share holders were a community content with the returns they received from the Company and went along with whatever the Managements thought good. Managements today are seen becoming increasingly answerable to the share holders.

Recently we have seen several cases where CEOs of the Companies having been voted out by the share holders for not falling in line with the thought process of the Organization and the share holders. We saw major changes in Hewlett Packard wherein the shareholders took the call to change the management and the strategic approach of the Company to business.

Organizations today exist in a situation which demands that they extend products and services as well as keep investing into building products and technology for tomorrow. If the business needs to exist and grow there is no option but to invest into the future. Therefore the shareholders take the centre stage when it comes to approval of and financing the Organisational business and growth plans. Shareholders today are aggressive demanding that the Organization walk the talk when it comes to the bottom line as well as in terms of its culture. Brands like IBM, HP and GE etc are more vulnerable to the stake holders as well as to the public as an Organization. These and other Corporate are using internet, Multimedia and websites to speak to the investors and extend the relationship with the share holders and investors. Internet platform allows the corporate open up relationship with the share holder community on an interactive basis thus giving the Company the control on how to manage the relationship as well as build investor confidence.

For Companies that are looking for investments to fuel their growth engines, there exists a need to demonstrate and cultivate the right corporate image and capability besides the past performance figures which alone will not help attract investors. Companies are therefore engage in Public relations as well as corporate communications to reach out to the prospective investor public as well as institutions to build the right kind of corporate image. Image building and relationship building become the long term strategy of the corporate communications of the Organization.

Social Responsibility

In the recent times the social responsibility and attitude of the Companies towards their responsibilities is becoming more and more visible and public. NGOs and specific interest groups are taking the lead in keeping track of and benchmarking social responsibility performance of the Corporate thus making them accountable. The brand image of the Organization is definitely affected by the way it is managing its social responsibility with the community, investors as well as policy makers being active participants as watchdogs.

Organizations have had to engage with the communities by way of participative activities as well as using communication strategies and by maintaining and managing relationship to be able to get across the right perspective as well as the right information. The recent example of GAP having had to withdraw from sourcing clothing from Indian Companies and suppliers who engaged child labour in the production lines is an ideal example which showcased the power of the community and the stake holders forcing the Company to take immediate action and use its relationship to project the right image for itself. The recent oil spill of BP in the west coast is another ideal case for study of how BP manages the relationship with the Govt, with its share holders, with the affected communities as well as manage its social responsibility.

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Posted in B2B, Brand Managment, Consumer Behavior, CRM, eMarketing, Management, Marketing Mix (New Concepts) with tags , , , , , , , , , , on December 1, 2011 by Consultant

Motivation and Morale – Relationship and Differences

Morale can be defined as the total satisfaction derived by an individual from his job, his work-group, his superior, the organization he works for and the environment. It generally relates to the feeling of individual’s comfort, happiness and satisfaction.

According to Davis, “Morale is a mental condition of groups and individuals which determines their attitude.”

In short, morale is a fusion of employees’ attitudes, behaviours, manifestation of views and opinions – all taken together in their work scenarios, exhibiting the employees’ feelings towards work, working terms and relation with their employers. Morale includes employees’ attitudes on and specific reaction to their job.

There are two states of morale:

High morale – High morale implies determination at work- an essential in achievement of management objectives. High morale results in:

  • A keen teamwork on part of the employees.
  • Organizational Commitment and a sense of belongingness in the employees mind.
  • Immediate conflict identification and resolution.
  • Healthy and safe work environment.
  • Effective communication in the organization.
  • Increase in productivity.
  • Greater motivation.

Low morale – Low morale has following features:

  • Greater grievances and conflicts in organization.
  • High rate of employee absenteeism and turnover.
  • Dissatisfaction with the superiors and employers.
  • Poor working conditions.
  • Employees frustration.
  • Decrease in productivity.
  • Lack of motivation.

Though motivation and morale are closely related concepts, they are different in following ways:

While motivation is an internal-psychological drive of an individual which urges him to behave in a specific manner, morale is more of a group scenario.
Higher motivation often leads to higher morale of employees, but high morale does not essentially result in greatly motivated employees as to have a positive attitude towards all factors of work situation may not essentially force the employees to work more efficiently.
While motivation is an individual concept, morale is a group concept. Thus, motivation takes into consideration the individual differences among the employees, and morale of the employees can be increased by taking those factors into consideration which influence group scenario or total work settings.
Motivation acquires primary concern in every organization, while morale is a secondary phenomenon because high motivation essentially leads to higher productivity while high morale may not necessarily lead to higher productivity.
Things tied to morale are usually things that are just part of the work environment, and things tied to motivation are tied to the performance of the individual.

Posted in Brand Managment, Consumer Behavior, CRM with tags , , , , , , , , , , , , on November 30, 2011 by Consultant

Challenge the Status Quo! Take on a Dominant Market Player [Slide Show]

111118-01. Intro111118-02. 1. Establish your brand111118-03. 2. Build trust
111118-04. 3. Do something different111118-05. 4. Dive in111118-06. 5. Be patient
111118-01. Intro

We all learned on the playground in elementary school that it’s never a good idea to take on the big kid. That first physics lesson we learned—that larger objects push harder than smaller ones—reinforced that notion in our rapidly developing, dodgeball-obsessed minds.

But was that really an accurate lesson? After all, ordinary-sized David defeated giant-sized Goliath with nothing more than a pebble and a slingshot. So why can’t you? The answer is, You can! But to effectively beat the giant in your industry, you’ll need to focus on these five things.

111118-02. 1. Establish your brand

1. Establish your brand

As a startup, establishing your brand is the first and most important step in building a business. Coming in as a new player, you will encounter uncertainty about your brand from potential consumers who are unfamiliar with your name, products, quality, differentiation, etc. But you can use that to your advantage.

Humans have an innate curiosity and desire to explore. If you disagree, watch a young child be entertained for hours upon hours by ordinary objects, such as kitchen utensils or cell phones. Even though your target market has most likely grown out of playing with common objects for hours, that curiosity remains.

How can human curiosity benefit your brand? Draw on that human trait by positioning your business as something new and unique. Don’t give up all of your information up front; catch your targets’ interest and make them wonder. Their curiosity will take over and subconsciously motivate them to seek, search, and investigate, which will ultimately drive traffic to your website. Then, it’s your job to get them to stay.

So, how do you keep the market share you’ve gained?

111118-03. 2. Build trust

2. Build trust

Customers will not give you their money if they do not trust you. As a new company, you’ll have a hard time building trust via past buying experiences, because your target market has likely never before bought from you. So the next best way to build immediate trust is to identify with your customers on a personal level. Be transparent. As a small business, you actually have the advantage; you aren’t viewed as a faceless corporate monster. Use that advantage to develop closeness with your customers, and you can bet that they will multiply.

111118-04. 3. Do something different

3. Do something different

Whatever you do, don’t try to enter a market dominated by a major player by using the exact same business model as the Goliath. Customers’ brand loyalty to the “big kid” will quickly destroy your business. But finding a way to improve or diversify the market will create an avenue for you to compete.

For example, my company created a new pay-per-click (PPC) billing model that was completely unique in the automotive industry. Having a unique offering allowed us to quickly develop strong relationships with suppliers and create the critical mass necessary to start driving traffic (pun intended) to Netcars.com, our website.

But what if being different doesn’t work? Another benefit you have as a small, upcoming competitor is flexibility. Exxon Mobil might not be able to change its business model overnight, but Mom and Pop’s Convenience Store can. So listen to customer feedback, integrate it, and adapt.

111118-05. 4. Dive in

4. Dive in

We’ve all been in a situation where it was necessary to “test the water.” When I go to the pool, I dip my toe in first to see how cold the water is. But that’s not going to work in a market dominated by a major player.

When you dip your toe into a big pool, you hardly create ripples. On the other hand, doing a cannonball into the pool would create major waves all around you.

When taking on a major player, then, your goal is to disrupt the market—to do a cannonball into the market. So, make your entrance a massive push. Market like hell. Prepare for growth. Staff early. Get the right people on board, and then figure out where they fit into your business as the ripples grow.

After all, you get only one shot to launch.

111118-06. 5. Be patient

5. Be patient

Penetrating a concentrated market isn’t a game of Jenga. (In that game, pulling out one block could cause an entire tower to topple.) Instead, making an impact on the market is more of a marathon, not a sprint. Cheesy analogies aside, don’t expect to bring down the competition overnight.

Keep your brand consistent and unique, continue to innovate, and challenge the status quo. Time will bring results.

* * *

You’ll still have to find your own pebble, but I hope this information will be the slingshot you need to take on the Goliath that your company faces. Happy hunting!

Posted in B2B, Consumer Behavior, CRM, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , on November 29, 2011 by Consultant

How Vulnerable Are You to Customer Defection?

In the early ’90s, the term “customer relationship management” (CRM) joined the marketing lexicon. Though the idea is often thought to refer to the implementation of some kind of technology, the real idea behind CRM is that the management of customer relationships is a business imperative.

CRM is about deciding which customers or segments to target, and then developing customer acquisition, retention, and growth plans that will attract and keep your best customers. CRM is really about making your customers the heart of your business.

Our job as marketers is to acquire, grow, and retain profitable customer relationships to create a sustainable competitive advantage.

How do you measure customer relationships?

We’ve all come to accept that creating customer loyalty is an integral part of any organization’s strategy and focus. Various factors influence the success of any customer relationship initiative. Here are five critical success factors:

  1. Clearly defined business outcomes related to customer acquisition, retention, and growth
  2. Agreement about who the customer is and what they want and need from your category (and you)
  3. Well-defined customer segments (and their desired behaviors) and customer-experience objectives
  4. A documented, integrated customer strategy
  5. Explicit measures of success, and the data and processes needed to support the metrics

 

Customer satisfaction and loyalty are two of the most common measures of success. A variety of models are used to measure and quantify customer loyalty, ranging from simple recency and referral models to RFM and customer lifetime value models. Recent research is examining those models to ascertain which, if any, truly measure customer loyalty.

Many organizations would agree that a loyal customer…

  • Stays with the brand despite competitive offers, changes in price, negative word-of-mouth, and product failures
  • Increases business/engagement in some way
  • Actively promotes the brand to others

Though there are many approaches to measuring customer loyalty, one metric that many organizations should consider is the Vulnerability Index.

Add the vulnerability index to your marketing KPIs

A vulnerability index serves as a way to measure loyalty in the face of competitive pull. Its purpose is to help you identify your most loyal customers—those who are going to stick with you through thick and thin.

To calculate your vulnerability index, you will need excellent market intelligence about your competitors’ campaign’s channel, offers, and markets. Once you have this information, follow these seven steps to construct your vulnerability index:

  1. Map the competitive activity. Include the competitor’s name, offer, duration of offer, and the offer’s focus area and market.
  2. Generate a list of loyal customers in the market where the campaign ran.
  3. Map their repurchase and engagement cycle based on frequency and last purchase date.
  4. Isolate all the customers whose repurchase or renewal dates fall within the competitor’s campaign period. This is your observation set (OS) and the set of customers who will experience the greatest competitive pull and are, therefore, the most vulnerable.
  5. Define your observation period, which is generally the campaign launch date and one purchase cycle after the last date of the competitor’s campaign.
  6. Monitor the purchases by vulnerable customers. Track all the customers whose purchases drop during the observation period. These customers constitute your vulnerable set (VS).
  7. Calculate the vulnerability index. Divide your VS by your OS and multiply that number by 100:

    Vulnerability Index = (VS/OS) x 100.

The index will give you a good idea of the proportion of customers who are succumbing to competitive pressure and some idea about the level of loyalty in those customers. If the index is high, you know that there is something to worry about. If the index is low, you can assume, with some degree of certainty, that your customers are exhibiting robust loyalty to the brand.

Because Marketing is charged with finding, keeping, and growing the value of customers, customer retention falls within the domain of marketing. Therefore, marketing organizations should have at least one objective aimed at retaining customers.

In addition to monitoring customer loyalty and advocacy and customer churn, Marketing should also keep tabs on customer vulnerability. If your vulnerability index begins to climb and exceed that of your competitors, you can anticipate that your defection rate is going to increase.

By monitoring your vulnerability index, you will know who your most loyal customers are, and you will be able to develop and implement strategies to withstand competitive pressure.

Read more: http://www.marketingprofs.com/articles/2011/4629/how-vulnerable-are-you-to-customer-defection#ixzz1f5bJmseK