IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
UNIT 2: BUILDING CUSTOMER LOYALTY THROUGH CUSTOMER SERVICE
Content Standard: The value of customer relations and customer service
Performance Standard: The learners shall be able to…
• develop a program for customer service
Learning Competencies: The learners shall be able to
• define “relationship marketing”
• explain the value of customers.
• identify and describe “relationship development strategies”
• illustrate successful customer service strategy in the Philippine business enterprise
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
LESSON 3: RELATIONSHIP MARKETING
OBJECTIVES:
• Define Relationship Marketing
• Enumerate the levels of relationship marketing
• Explain the value of customers
• Discuss the different types of customers
• Identify and describe relationship development strategies
• Illustrate the successful customer service strategy in the Philippine business enterprise.
• Define the meaning of service
• Identify the characteristics of service
• Discuss the components of service marketing
Nature and Concept
• One of the ways for companies to remain competitive is to provides superior customer service.
This in essence is relationship marketing; a company build customer loyalty by making customer
satisfaction its top priority
Relationship Marketing Defined
• Is the process of building and maintaining profitable customer relationship by delivering superior
customer value and satisfaction, thus ensuring brand loyalty?
• A key factor in relationship marketing is customer loyalty (also known as brand loyalty)
Customer loyalty tends to persist despite the actions of the company or changes in the
environment.
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
Levels of Relationship Marketing
• Customer loyalty is founded on excellent customer services. The five levels pf relationship
marketing define the levels of interaction between the customer and the company. It is also guide
in improving customer satisfaction
1. Basic Marketing – this is also called “direct sales” and is the most basic level of interaction
between the company and the customer. In basic marketing, a salesperson takes charge of selling
the products or services to customer
2. Reactive Marketing – the transaction moves to a higher level because the salesperson tells the
customer that he or she can be contacted to answer any inquiry about the product or service
3. Accountable Marketing – In this level, the salesperson voluntarily contacts the customer to
ensure that the product is in perfect condition and asks if it met the latter’s expectations.
4. Proactive Marketing – The company works closely with a group of regular customers who
provide constructive feedback for the improvement of the product or services.
5. Partnership Marketing - In the final level, the company has already built a loyal group of
customers who can help in improving its performance and offerings.
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
Building Customer Value
• Customer Value is defined as the satisfaction derived from what a customer may experience or
expect to experience by choosing a particular action relative to the cost of that action.
• The action can be a purchase, a visit, an order, or a sign up.
• The cost refers to anything that can be given up receiving the desired product or service, which
can be in the form of money, time, knowledge, data, or others
Levels of Customer Value
• The levels of customer value indicate what the customers expect and do not expect from their
purchase decisions.
1. Basic and expected levels – These levels include the basic requirements of conducting a
business. For instance, restaurants are expected to have a spacious dining area and clean tables
and utensils. If these requirements are not met by the business, it cannot provide high quality
customer value
2. Desired customer Value – This involves what the customers want from the purchase or service
experiences. This is the first opportunity for a business to get ahead of the competition. For
example, a retail shop can provide friendly and helpful staff who can assist the customer in
making the right decision
3. Unanticipated Customer value – It pertains to an unexpected purchase or service experience
that may go beyond what the customer desire. For example, in a gasoline station, the gasoline boy
cleans the car windows after filling up the customer’s gasoline tank without an extra charge.
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
Types of Customer
• There are four types of customers based on projected customer retention and loyalty to the brand.
1. Strangers – are customers whose needs do not fit the company’s offerings. The company does
not need to invest and exert effort to win them.
2. Butterflies – as the name implies, are not loyal to a specific brand because they keep on looking
for the best deals which may lead to patronizing other brands. The company can enjoy profits
from these customers only for a short period.
3. True friends – have needs that match the company’s offerings. They make repeat purchases and
patronize the brand so long as it satisfies their needs.
4. Freeloaders – are loyal but not profitable because of the limited fir between their needs and the
company’s offerings. For example, a few customers of a salon patronize its service regularly but
do not generate enough profits to sustain the maintenance costs, it can earn only if it raises the
prices of its services.
Relationship Development Strategies
• Recent research has shown that loyal customers prove to be more profitable than ordinary
customers. This is the reason why companies are challenged to maintain customer loyalty.
• Companies should practice the following relationship development strategies to retain loyal
customers:
1. Communicate with customers frequently and effectively – It is important to always get in
touch with customers through e-mail and social networking sites to sustain brand recall.
2. Offer customer rewards – customer loyalty program, which include special discount, perks, and
freebies, may work week for various types of products and services.
3. Conduct special events and provide sponsorship – companies can hold or sponsor parties,
concerts, contest, and the like to boost interaction among loyal customers and company
representatives
4. Enhance customer service – some companies outsource their customer services to third party
organizations to cater to complaints and inquiries, promote their latest offering, and provide
technical support.
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
5. Utilize languages to reach a wider customer base - marketers can create promotional materials
in different languages to cater to specific region.
Customer Service in the Philippine Business Enterprise
• The success of our grown companies lies not just on their offerings but also on their customer
services. Local business now utilizes customer service tools that fir our customer- oriented culture
and extensive technology usage.
• Most companies provide a customer hotline that customer can call for inquiries, concerns and
technical support. For example, customer can call PLDT to ask for assistance regarding their
faulty internet connection. The customer service representative (CSR) can either provide a step-
by-step guide on how to trouble shoot the problem or schedule a visit from a company technician,
depending on the issue at hand.
1. Email and SMS – also helps businesses communicate with their clientele more easily as
most consumers regularly check their inboxes.
2. Social networking sites- aside from their primary function of connecting people, have
become a channel for netizens to ask for customer support. Globe telecom promptly responds
to inquiries and complaints on Facebook and Twitter and redirects the customer to the site’s
private messaging system for further assistance.
3. Live chat support – facilitates a real-time correspondence between the customer and the
company representatives.
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
Serviced Defined
• A service is an act that is provided by a party that creates value and provides benefits to the other
party. Organizations that offer services include restaurants, hotels, airlines, banks, schools,
hospitals, telecom companies, among others.
Difference between Goods and Services
Given below are the fundamental differences between physical goods and services:
Goods Services
A physical commodity A process or activity
Tangible Intangible
Homogenous Heterogeneous
Production and distribution are separation from Production, distribution and consumption are
their consumption simultaneous processes
Can be stored Cannot be stored
Transfer of ownership is possible Transfer of ownership is not possible
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
Characteristics of Service
1. Intangibility – a service does not have a physical appearance that can be seen, touched and
describe quantitatively.
2. Inseparability – a service involves simultaneous production and consumption, so there is
outright feedback. A haircut is done by the hairstylist and at the same time, done to the
customer.
3. Perishability - a service that cannot be stored or returned.
4. Homogeneous – The service in itself is the same but the way it is provided may differ from
time to time.
Components of service marketing
1. Product and its Elements – There are services that only supplement the main product. The goal
of the marketer is to create a bundle of supplementary services that increases the value of the
main product. For example, a high-quality appliance with superior quality has a higher value if it
comes with free delivery and extended warranty.
2. Time and Place – The channel of distribution is crucial in-service delivery. The service should
be rendered on time and in an appropriate venue or location. For example, fast food restaurants do
not take long in preparing and serving meals as they expected to deliver a speedy service. Also,
these restaurants must be located somewhere accessible and with high foot traffic
3. Process – This is the method of service delivery. Marketers should be able to make the process of
availing and receiving the service convenient for the customers. For example, banks are now
offering online and mobile banking services for clients who want to avoid the long lines in their
branches
4. Quality Service or Productivity – The kind of quality of service provided to a customer cannot
be separated from how the service is rendered. The quality of a service is seen in how a service
IMMACULATE CONCEPTION POLYTECHNIC
SENIOR HIGH SCHOOL
Marian Road, Poblacion, Sta. Maria, Bulacan
satisfies and meets the needs, wants and expectations of the customer. For example, a courier
designs a wedding gown.
5. PEOPLE OR SERVICE PROVIDERS – The ultimate proof of service quality manifest in the
people who provides the service to the customer. They must be skilled, knowledgeable, friendly,
accommodating, and customer – oriented. For example, the quality of a dining establishment does
not depend on the food or the place alone, the server’s skills and attitude towards the diners are
also taken into account.
6. PROMOTION – Companies must use various means to inform the public about the services and
reach a wider customer base. This may be through word – of – mouth and advertisements.
7. PHYSICAL EVIDENCE – While a service is inherently tangible, there should still be visible
cues that will indicate its quality. For example, a hotel with elegant furnishings and a beautiful
landscape creates an impression of quality service.
8. PRICE – the price of the service depend on its perceived quality. For example, two salons in the
same neighborhood with the same services may have different price points because of many
factors. The first salon may have more sophisticated ambiance and a group of well-known
professional hairstylists so they can charge more; the other one may be an establishment with
simple interiors and self-taught hairdressers, so customers pay less for their services.
