Customer Satisfaction, Loyalty, and Empowerment Study Guide
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An introductory marketing study guide from the University of Minnesota.
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Customer Satisfaction, Loyalty, and Empowerment - Study Guide
Customer communities form around social networks, which marketers can use to both promote offerings and gather market information. Companies create influencer panels that provide insight into effective offerings and provide word of mouth.
Customer loyalty is both behavioral and attitudinal. Habitual purchases are a form of behavioral loyalty. Cause-related marketing can foster attitudinal loyalty among a company’s community of customers, as can loyalty programs. Loyalty programs can have four positive effects: They can increase the longevity, or lifetime value, of customers; block competitors’ marketing efforts; encourage customers to buy related offerings; and accelerate their purchases. Loyalty programs don’t automatically create loyalty among customers, though. Loyalty is created when a company performs well, responds to its customers, identifies its loyal customers, makes the benefits of its loyalty program transparent (obvious), and when the firm builds a community among its customers.
Measuring customer satisfaction is an important element of customer empowerment. But satisfaction alone is a minimal level of acceptable performance. It means that the customer’s expectations were met. Getting positive word of mouth requires exceeding those expectations. To minimize the number of complaints a company needs an effective process of both handling complaints and understanding their causes so any problems can be corrected. Because the complaint process itself is subject to complaints, monitoring your firm’s customer satisfaction levels also means you must monitor how satisfied customers are with your company’s complaint handling system.
Sugging is selling under any phony type of front. It includes posting fake reviews about products online. Sugging damages a seller’s trust among buyers and should never be done. U.S. laws govern how products can be marketed, both those that are sold electronically and through more traditional channels. Companies must have permission before they can send you spam, and they have to tell you how they will gather and use your personal information. Warranties—expressed and implied—are binding no matter how companies deliver them. Good marketers anticipate less-than-honest activities by individuals and take steps to prevent them. Bots are online robots that some people use to take advantage of marketers.
Do you have a dump account? What are some other ways that consumers resist marketing attempts? What can, or should, marketers do to get their messages through, or around, such attempts to block or avoid messages?
Are you especially loyal to any one brand? If so, what is it and why are you so loyal? When successfully building loyalty and community, trust seems to be the biggest factor. How can a company build trust? Should consumers trust companies? Why or why not? Do you think some consumers are just more prone to be loyal to companies and other consumers are not? Why or why not?
How does a company demonstrate responsiveness? How would you design a feedback system so that your company could be responsive? How would it vary if your company sold to other companies versus selling to consumers?
Some experts are beginning to question the value of immediately responding to every tweeted complaint with something free, arguing that consumers are wise to the ways of companies and tweeting false complaints in the hopes of getting something free. Have you known anyone to do this? How do you think companies should handle tweeted complaints?
A USA Today article described how schools sell directories to companies that then market to the students (Martin, 2009). The schools included public school districts as well as colleges and universities. Have you noticed any marketing to you that probably came as a result of your school selling its directory? If so, what was being sold? Should schools continue to sell directory information (name, address, and phone numbers) or should that information remain private?
Think about Web sites you visit regularly. Are any likely to be a community site? Is the site managed by a company who sells products to the community?
Discuss the tension marketers might feel when describing their product. Do they underpromise and overdeliver? Or do they promise the moon to get sales?
Describe a situation where you had a legitimate complaint about a company’s offering. How did the company handle it? Was it handled well? What were the company’s consequences of the situation?
Customer empowerment is a relatively recent phenomenon. Give some examples of your own consumer activity in which you experienced empowerment.
Have you clicked on an ad on Facebook? Do you like companies, movies, or offerings on Facebook? What has happened when you liked something? Discuss whether you think some consumers are more prone to like offerings than others and why.
Go online to the M&Ms Web site (http://www.mms.com/us/index.jsp) and evaluate it. You will have to go through more than just the main landing page—click on the current contests and other pages to get all the data you need. What does the company do to build loyalty? To build community? Are there opportunities for feedback? Does the company partner with other organizations to leverage the loyalty those other companies enjoy with their customers? If so, what is M&Ms doing? Overall, what do you think is most effective about the site? What is the least effective?
Many schools are trying to build loyalty programs that strengthen alumni ties. Assess and critique any loyalty program your school has (take a look at athletics first, as that’s usually where they start). Then redesign it. Be explicit in describing how your program will create the four effects of a loyalty program.
Principles of Marketing by [Author removed at request of original publisher] is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.
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The University of Minnesota Libraries Publishing edition, 2015 is adapted from a work originally produced in 2010 by a publisher who has requested that it not receive attribution.