Professors on the Go



Chapter 5

Creating Customer Value, Satisfaction, and Loyalty

Key Concepts:

1) Customer Perceived Value

Have students (in groups or individually) select a local firm in their community, or a local division of a national firm. Then, request permission to interview their corporate executives on their corporation’s definition of customer satisfaction, loyalty, and what their particular firm does to foster such customer relations. This project can be combined with the project on marketing research and as such, students can create questionnaires suitable for mailing to these executives. The students can then present these findings to the class in a group or by individual presentations. This could be a full semester project or limited to a few weeks of the semester.

2) Delivering High Customer Value

Key retailers emphasize service, customer satisfaction, and loyalty. Retailers such as Nordstrom, Saturn, Lexus, Infiniti, and others have a reputation for outstanding customer service and satisfaction. In small groups, have the students visit these key retailers (and other retailers pertinent to your trading area) and write down their observations regarding what service quality clues they experienced during their in-store visits. Secondly, these same students should visit contrasting retailers and look for similar signs and clues to quality service. In a prepared report, students should note what elements of customer satisfaction was and was not present at each level of service provider. Taking the position then of a “shopper” students should comment on which retailer would most likely retain customers and why.

3) Total Customer Satisfaction

Key manufacturers and others must be concerned with how their customers view their products (customer satisfaction perceptions) being disseminated throughout the “electronic world” via the Internet. No longer can one discount the “power of the mouse” for affecting potential customers. In small groups, students are to select a particular firm or product and research what is being said on the Internet regarding this company/product. What affects/effects does this type of dissemination of consumer opinions via the Internet have on the company’s marketing strategies? What can the company do to stem the tide of such comments? How does a company defend itself against blatantly untrue consumer opinions?

4) Customer Expectations

Students who regularly shop at one of the main Internet sites (, , , etc.) experience some customer bonding with the provider. Ask students to comment on their experiences with these providers in terms of: Does the customization aspect of the provider encourage you to shop more, or is the customization aspect of the provider more of an intrusion or hindrance? Does the customization provided concern you as to the level of personal information collected by the company? Do you feel that some of your “right to privacy” is being compromised for the sake of developing “bonds”?

5) Measuring

You and your class colleagues have decided to start a business upon graduation. Your expertise is in marketing so you have decided to start a marketing consultant firm. As one of your basic underlying competitive distinctions, you have decided upon “exceptional service is our minimum” as your tag line. Now you must define “exceptional service” and translate that tag line into specifics. Using each of the major headings contained in this chapter, detail how you plan to communicate “exceptional service.”

6) Maximizing Customer Lifetime Value

In small groups (five students suggested as the maximum), have the students make appointments with local insurance agents, financial planners, or other service professionals in their area to discuss the agent and his company’s philosophy on customer value, satisfaction and loyalty. Specific questions to ask include How does your company (and you individually) define customer satisfaction? How do you go about delivering value to your clients? How do you (and your company) calculate the lifetime value of a client? Students should prepare a report to be presented either to the class or as written group paper.

7) Competitive Advantage

The research firm J.D. Power and Associates lists eight categories of products for consumers to research before purchasing the product or service. Breaking up the class into eight groups, have the students research the top performers for each category then share their findings as to which characteristics, policies, procedures, and vision these top-rated companies have in common. Is there a “common” link among all of the winners? Are there differences? In terms of the material contained in this chapter, how would you explain these similarities and differences?

8) Customer Equity

Consider the customer lifetime value (CLV). Choose a business and show how you would go about developing a quantitative formulation that captures the concept. How would organizations change if they totally embraced the customer equity concept and maximized CLV?

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