CHAPTER 2:

COSTUMER RELATIONSHIP:
COSTUMER SERVICE
 A costumer is a person or
organization that transacts with
Costumer-Driven businessperson or business
Marketing organization to buy goods or
services for monetary or other
valuable consideration.
  Costumer service is the process of ensuring
costumer satisfaction with a product or
service. Costumer service can take on many
forms-salesperson assistance, product
delivery, technical advice, help desks, or
Costumer other means.
Service  Call center representatives is one of the most
in demand jobs in the Philippines where they
assists costumers with online transaction
and/or reservations, product information,
and many others as via telecommunication.
  Retail establishments have realized that
costumers are not only drawn to stores
because of their product offerings and
Costumer Service convenient locations, but also by the
Programs superior costumer services they provide.
 Most high-end boutique stores employ
highly qualified salesperson to deliver
excellent costumer service.
 Companies can best manage costumer service
quality by:
 Establishing service objectives and specific and
measurable targets.
 Committing sufficient organizational resources
Managing Costumer
towards the achievement of these targets
Service Quality
 Collecting costumer feedback on service
quality regularly
 Reviewing target accomplishment
 Identifying costumer service weaknesses and
connecting them
  Costumer-centered organizations can
differentiate their costumer service
through:
1. the development and training of
Managing Costumer competent costumer contact personnel and;
Service Differentiation 2. designing and implementing a superior
service delivery environment and process.
 Renovations are done when a store needs
to improve its facilities to serve its
costumers better.
 Costumer Service Practice Practicing Organization(s)
More restaurants and fast food
Free delivery chains
Rustan’s Supermarket, Mercury
Automated in-home ordering Drug
system
The following Free gift wrapping/plastic book
Rustan’s Department Store, Fully
Booked
are some of the jacket
DHL and other selected courier
Merchandise/document pick-up
more popular services
Some churches and religious
costumer service Free parking
organizations
practices in the Valet parking Some hotels and resorts
Some large department stores,
Philippines. Reservations, installment plans bookstores
Most car dealerships
Complimentary refreshments,
waiting lounge Telecommunication and technical
firms most utility firms and
Help desks, touch phone access, telecommunication firm
24-hour costumer hotline
  Costumer relationship management
(CRM) is a process of managing an
organization’s interactions with current
and future costumers. The rationale for
Costumer CRM is the recognition that companies
Relationship can sustain long-term profitability by
Management attracting and maintaining their most
valuable costumers. These are costumers
that can be directly or indirectly generate
the greatest revenues and financial
returns.
  Costumer lifetime value (CLV) is the
forecasted sales or profits that a
company can derive from the entire span
Costumer of the future relationship with a
Lifetime particular costumer.
Value  A costumer’s lifetime value can be based
upon the potential value and profitability
of their relationship with the company.
  It considers a long-term perspective of a company’s
relationship with costumers contrast to a short-term
view of “take the costumer’s money and run”.
 It calculates and compares costs of acquiring new
The CLV costumers and keeping old ones. This can be used to
perspective determine the revenues that are lost when an existing
costumer switches to another product. Costs for
has several getting new costumers are called acquisition costs,
distinct whereas, cost for maintaining existing costumers are
called retention costs. These are normally in the form
implications: of costumer support and promotional incentives.
 It highlights the importance of market segmentation,
with the recognition that some costumer groups are
more profitable than others.
 average peso value of a sale to a
particular costumer or costumer group
CLV can be
x number of repeat purchases in a year
measured x average retention time in months or years
using the = costumer lifetime value
formula:
For example, an
athlete who Costumer Lifetime Value
spends ₱2,000 ₱2,000 average peso value of a sale to a particular
for every visit to costumer or costumer group
a spa and goes x 24 number of repeat purchases in a year
to the spa twice x 5 average retention time in months or years
monthly for an = ₱240,000 costumer lifetime value
expected time
period of a five
years would
have a CLV of:
 1. Adopt the right mindset towards costumer service.
2. Purchase or develop CRM software.
3. Quantify costumer acquisition and retention loss.
Successful 4. Develop and implement costumer service training
Costumer program.
Relationship 5. Empower salesperson to make decisions.
Management 6. Establish communication lines between your
costumer and costumer contact staff.
Stategies
7. Shop your competition.
8. Keep innovating costumer service.
9. Promote genuine costumer service with a passion.
 1. Why does it seem only high-end retailers practice
superior costumer service? Is it possible for low-to end
retailers to give superior costumer service?
2. Why is there a need to maintain relationships with
costumers? Does this apply to the neighborhood sari-
sari store? Explain.
Exercise 3. What does empowerment of salespersons to make
decision mean to you? Explain.
Questions 4. Narrate your recent shopping experience. Was it
pleasant? Were you satisfied? Explain how costumer
service plays the role in your experience.
5. Is the market driven by the costumer needs and wants?
Give examples of products or services that are offered
because of costumer needs.