MARKETING MANAGEMENT II

Putting the Service-Profit Chain to Work

Group 2
- K Srivatsav 18PGP081 - Manisha 18PGP091
- Lekshmi D 18PGP083 - Manjiri 18PGP092
- Sai Sachin Lingala 18PGP084 - Ravi 18PGP120

12-10-2018
Indian Institute of Management Raipur
 12-10-2018
Indian Institute of Management Raipur
• Customer Loyalty Drives Profitability and Growth
• 5% increase in customer loyalty leads to 25% to
85% profit increase
• Quality of market share = customer loyalty
• Customer retention
• Depth of relationship

• Customer Satisfaction Drives Customer Loyalty

• Xerox Survey
• Satisfied and Very satisfied customer

12-10-2018
Indian Institute of Management Raipur
• Value Drives Customer Satisfaction
• Insurance Company Progressive’s CAT Team delivering value
• Highest margins - property-and-casualty insurance

• Employee Productivity Drives Value

• The South West Story
• Positions are flexibly defined
• 40% Aircraft Utilization more, Pilot Hours -70

• Employee Loyalty Drives Productivity

• Abt Associates example
• Replacement of sales rep ~ $36000
• Cost of a Valued Broker – $2.5 million

12-10-2018
Indian Institute of Management Raipur
• Employee Satisfaction Drives Loyalty
• 1991 Proprietary study of property-and-casualty insurance
company’s employees
• 30% dissatisfied – Leave, Thrice than satisfied
• Southwest Airlines – Country’s 10 best places to work,
Turnover < 5%
• USAA example

• Internal Quality Drives Employee

Satisfaction
• USAA, Sales and service rep – IT System
& Detailed Job Training
• Service Master – High Customer
Interaction

12-10-2018
Indian Institute of Management Raipur
 12-10-2018
Indian Institute of Management Raipur
Leadership Underlies the Chain’s Success
• Leaders – Willingness to interact
• USAA – Public Recognition of Outstanding Employees

Profit and Growth

• Loyal Customers - Top 20%
• Breaking even – Credit card ~ 6 years : Marketing and Bad-Debt costs
• Why do customers defect? – Eg: Credit card service’s phone call – One
third of defectors

Customer Satisfaction
• Gathering customer satisfaction data
• Translating the data into information
• Using information for improving the quality of service
12-10-2018
Indian Institute of Management Raipur
External Service Value
• Service value = Cost to the customer + Results achieved for the customer
• Service quality = f(gap between service received and service expected)

Employee Productivity
• Measured in terms of both quality and quantity
• Quality = Customer Satisfaction
• Quantity = Total output of organization
Employee Loyalty
• Hand in Hand with productivity
• Employee retention is prime aspect
• Awards and Rewards
Employee Satisfaction
• Surveys, Frequent interaction, Round table discussion

12-10-2018
Indian Institute of Management Raipur
 Leadership

• Caters both needs of customers and employees

12-10-2018
Indian Institute of Management Raipur
Thank you!

12-10-2018
Indian Institute of Management Raipur