Page 87 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes

Notes Needs are expressions of customers, indicating the requirement to be fulfilled by
a select product or service.

Effective marketers try to understand if the discrepancy between expectations and
performance is large or small. The term delightful surprises has been use to describe
situations in which customer receive fulfilment that exceeds the satisfaction of unexpected
needs or wants. A delightful surprise may be a defining moment in which a regular
customer becomes a loyal advocate. Effective marketers likewise try to understand the
degree of discrepancy when marketers fail to meet expectations and the causes of consumer
dissatisfaction.
Satisfied customers may not be loyal customers. One explanation is that expectations,
which shape satisfaction, are complex and exist at different levels. People may formulate
expectations in terms of a desired level – what should be done – and in terms of an
adequate level – what will be done. Many marketers believe customers have a zone of
tolerance where expectations range from what they hope to receive to what is minimally
in a study of satisfaction. The company ranked satisfaction on a 5-point scale ranging from
1 for completely dissatisfied to 5 for completely satisfied. It found that customers who
rated their satisfaction as 4 were six times more likely to switch to a competitive offering
than those who marked 5 were. So, while satisfaction is important in knowing what
shapes loyalty, we have to go deeper to fully understand loyalty.
Why do satisfied customers often switch brands or buy from other companies? There are
several explanations. The first is that a company’s satisfied customer might also have a
positive experience with and be equally satisfied with a competitor’s offering. Thus relative
satisfaction should be considered in the role that customer satisfaction plays in shaping
customer loyalty. Another explanation has to do with familiarity and a need for variety.
People may simply opt for an experience because they get less and less satisfaction from
the old one. A third explanation is that new information changes customer expectations
about a previously untried offering.
2. Emotional Bonding: The second component of the model shown in Figure 4.3 builds on
the idea that, over time customer loyalty requires emotional bonding. Customers have a
positive brand affect, which is an affinity with the brand, or they have a company
attachment, which means they like the company. In many circumstances, consumers may
identify with and become emotionally attached to mental images that a company or a
brand develops or acquires.

For example, many customers identify with Polo Ralph Lauren. They identify with the
brand because the brand identifies them and their friends.
From a consumer’s perspective the brand equity associated with Polo leads to customer
loyalty. Brand equity is the value of the brand name associated with a product or service
that goes beyond the functional aspect alone.

For example, many customers feel a closeness with other people who also use the good or
service.
Some companies know how to connect emotionally with their customers while others
have more difficulty in accomplishing this level of commitment. CRM must reach beyond
the idea of the rational consumer and strive to establish feeling of closeness, affection, and
trust as true emotional bonding is often based on trust and respect.

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