Total Customer Benefit and Total Customer Cost
Total Customer Benefit is the aggregate benefits that the customer perceives that he is getting from a certain products or services. The benefit can be expressed in value relative to the cost. The value consists of everything to maintain a product or service in good condition for a certain length of time. This may include maintenance service and replacements parts. The perceived total benefit or value should be higher than the perceived total cost.
Meanwhile, the total customer cost is the total cost of a product or service to the customer upon acquisition and all additional costs related to acquiring and maintaining the product or service. The additional costs can include the cost of customer’s time, cost of research, travel and many other things.
In choosing brands or products, customers usually evaluate the total benefits to the total cost and compare the net perceived value for each brand.
Conformance Quality and Performance Quality
Conformance quality is a term frequently used in manufacturing. It is the exactness for a product to meet the specific requirements within a certain degree of error. Every product has specifications that are very exact. All manufacturing processes, equipment, and devices should conform to all the measurements. If certain items do not meet any requirement, the final product may not fit covers, boxes and others. The standards allow only a small tolerance for error, like 99.99%. That means in every for every 1,000 units manufactured only one piece may not meet the specifications. If more than one piece is found, the entire batch may be rejected. The error rate can be much stricter. This may apply into almost any aspect of the process and to almost any product. Microchips are one product with very strict conformance standards. Cars are another. Conformance is very important because components of a product may be manufactured at different places and assembled in another. Also, a microchip could be installed in a satellite. Once sent in space, it cannot be easily replaced.
Performance quality is a measure of how the product performs after certain tests. The tests are applied to final products or its components. For a plastic manufacturer, a performance measure could be: at what temperature would the plastic begin to melt. Performance standard is usually applied at the end of the manufacturing or assembly process. Again, conformance standards may apply at the end. In car manufacturing, a simple measure of product performance is that a car should start and run immediately after it comes out of assembly. There should be no tinkering with anything. The same applies to consumer electronics like television sets. The TV should switch on and run when it goes out of the assembly floor.
Firing a Customer
A business may fire a customer when maintaining a customer becomes losing proposition in terms of profit, reputation, among other things. Forbes magazine identifies for occasions when they may be fired: (1) They insist on old pricing; (2) Breach of contract and abusive behavior; (3) They lack integrity; and, (4) New business model. The first three are self-explanatory. A new business model can mean that the business can no longer serve the customer. The product or service the customer needs is simply no longer available as a result of changes in the organization.
The customer may be negotiated with and retained if he agrees with revised terms or to use alternative products or services.
Activities to Build Customer Loyalty and Retention
Any effort to build customer loyalty and retention is part of the relationship management. Here are four of the common strategies.
Regular, Personalized Communication with and Special Offers . Communication with the customer needs to be prompt and customized, not something that is mass produced.
Customer service. Again, promptness is important in customer service especially with regard to problems.
Loyalty programs, appreciation awards and customer referral rewards . Giving away freebies, discounts, and other promos can entice a customer to keep coming back.
Listen and respond as quickly as possible . Listening is very important to understand specific concerns and problems. All queries should be answered as quickly as possible, less than 24 hours even for complex problems.
Brand Communities
A brand community is like-minded customers identifying with particular brand. They share similar traits and characteristics. Sometimes, they organize themselves communities so they can share experiences about and help solve problems about the brand. The members of these communities usually share the same values as the brand. Examples of brand community include PlayStation Community (Sony), Being Girl (Procter and Gamble) and My Starbucks Idea (Starbucks).
Works Cited
BusinessDictionary. (2016). Quality Management. Retrieved Feb 26, 2016, from BusinessDictionary: http://www.businessdictionary.com/definition/quality-of-performance.html
Dunford, A. (2010, May 27). Top 5 Customer Retention Marketing Tactics. Retrieved Feb 26, 2016, from RocketWatecher: http://www.rocketwatcher.com/blog/2010/05/top-5-customer-retention-marketingtactics.html
Kalman, D. M. (2009). Brand Communities, Marketing and Media. Terella Media. Terella Media Inc. Retrieved Feb 26, 2016, from http://www.terrella.com/bcmarketingwp2.pdf
Lavinsky, D. (2013, Oct 10). 4 Reasons To Fire A Client. Forbes.
Lister, J. (2016). What Do Total Customer Value & Total Customer Cost Mean? Retrieved Feb 26, 2016, from Chron: http://smallbusiness.chron.com/total-customer-value-total-customer-cost-mean-35183.html
Stringfellow, A. (2016, Jan 19). Customer Retention Strategies: 30 Experts Share Their Most Effective Tactics and Techniques for Retaining Customers. Retrieved from NGData: http://www.ngdata.com/most-effective-customer-retention-strategies/
