We have seen that the marketing concept centres on the importance of customers and the absolute necessity of identifying and satisfying their needs and wants. The marketer puts the customer at the centre of the business and the development of organizational strategies. This idea is fundamental to marketers and even non-marketers in that other business functions would not disagree with the notion of the importance and centrality of customers. If this is the case, why has there been an upsurge in the importance of customer care in marketing programmes in recent years, and how does the notion and scope of customer care differ from the traditional marketing concept? How can a company plan and implement effective customer care programmes?
Meaning and scope of customer care
Amongst the many views of the meaning and scope of customer care, the view taken here is that it involves planning all the activities involved in the customer–supplier relationship including pre-, during- and post-transaction stages to ensure that customer expectations are met or exceeded.
This view emphasizes the fact that customer care is all-embracing covering every aspect of customer–supplier relationships. It also illustrates that customer care involves planning in both the strategic and tactical sense.
Customer care entails much more than the notion of customer service, as this focuses more on ‘order-cycle’ related activities. Customer service is an important facet of overall customer care, but centres more on those activities that involve direct contact with the customer. Customer care is a much more holistic way of looking at customer satisfaction. It necessitates the involvement of every facet of the company’s marketing and customer-related programmes and should affect every stage of the marketing planning and implementation process. Why then do we need customer care, and why has it grown in importance in recent years? These are questions that we now examine.
Cost of poor customer care
It is increasingly recognized that should customer expectation at any point in the supplier/customer relationship not be met, this will result in customer dissatisfaction. The extent to which the customer feels dissatisfied depends upon the circumstances. For example, the customer may be simply mildly dissatisfied or at the other extreme might be ‘hopping mad’. Particularly where the latter is the case, we know that every displeased customer is likely to talk about this dissatisfaction to other customers or potential customers. Young1 suggests that customers with bad experiences are twice as likely to tell others about it as those with good experiences. Quite simply, poor customer care loses not only the customer involved, but many more as well.
Benefits of good customer care
We know that satisfied customers are more likely to return to buy again, and over time, become loyal. This illustrates just one of the links between customer care and RM. This is particularly important when we look at the costs of acquiring customers compared to keeping them. Kotler and Keller2 have suggested that in organizational purchasing settings it can cost as much as ten times more to acquire a new customer than it does to keep an existing one. Certainly, the marketing costs required to persuade a new organizational customer to purchase are much greater than those required to persuade a satisfied customer to purchase again. In this respect, the notion of a ‘ladder of loyalty’ has been developed. Peck et al.3 show this as involving the steps or rungs.
The first rung on the ladder, ‘Prospect’, represents an individual or an organization which the marketer could possibly persuade to do business. Once the prospect has been persuaded in this way they become a ‘Purchaser’, having done business at least once with the organization. The ‘Client’ is someone who has done business with the marketer’s organization on a repeat basis, but is still at best neutral towards the supplier. A ‘Supporter’, however, is someone who has done business with the marketer on a regular basis, but now begins to like the supplier’s organization and gives support if only passively. The penultimate stage, the ‘Advocate’, is a customer who recommends the marketer’s organization to others, i.e. effectively someone who helps to do your marketing. The highest rung of the ladder is represented by a ‘Partner’ who is a customer who effectively has the relationship of a strategic partner with the supplying organization.
As we shall see, RM is aimed at moving customers up the ladder of loyalty until they ultimately become partners. The lifetime value of loyal customers can be huge as measured in sales and profit terms. Given that customer care is a major facet in moving customers up the ladder of loyalty, we can see why marketers have become increasingly interested in the customer care aspects of marketing yet this does not explain in itself the growth in importance of customer care.
Perhaps the major reason for the growth in importance of customer care is the fact that customer expectations have changed over the years both in organizational and consumer contexts. Quite simply, customers expect higher levels of customer care and satisfaction from the marketer. In part, this is as a result of changes in education on the part of many customers. Customers are now more ready to challenge poor levels of customer care and are much better informed as regards their rights in this respect. Another factor is that customers have much better access to information about failings and shortcomings in customer care through more media exposure in this area and information that is posted on the Internet. Customers are also better protected through legislation regarding their rights as customers and what they can realistically expect with respect to customer care.
The relationship marketing ladder of loyalty
Today’s customers are more willing to complain if they feel their expectations have not been met. Moreover, they are increasingly likely to follow up these complaints through some form of formal procedure and even litigation if necessary. It is important to stress, however, that the average customer, even in the USA, where perhaps the highest levels of customer expectation with regard to customer care in the world exist, is still reluctant to complain. For example, a report by The US Office of Consumer Affairs4 suggested that the average business does not hear from 96 per cent of its unhappy customers, and that for every complaint received there were as many as 30 customers with problems or serious problems. In countries like Germany, Ireland and the UK where customers are more reluctant to complain, these figures are likely to be even higher. One might be tempted to believe that most customers are simply not that concerned about customer care, to the extent that they perhaps do not think it is worth complaining. Certainly, many customers do not feel it is worthwhile, but this is more a reflection of the fact that they feel that their complaints will go unheeded. Other customers simply may not know how to start to complain in a formal way. This does not mean that such customers are not concerned about customer care or that the marketer need not be too concerned. Just the opposite is the case; it is probably customers who do not complain that are most important with regard to focusing improved customer care efforts. Such customers represent a majority of customers who never purchase again, and who represent the main source of negative information about a company, and this is passed by word-of-mouth to other potential customers.
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Marketing Management Tutorial
Development Of A Strategic Approach To Marketing: Its Culture; Internal Macro- And External Micro-environmental Issues
Markets And Customers: Consumer And Organizational Buyer Behaviour And Marketing Strategy
Markets And Customers: Market Boundaries; Target Marketing
Product And Innovation Strategies
Channels Of Distribution And Logistics
Customer Care And Relationship Marketing
Marketing Information Systems And Research
Analysing The Environment: (opportunities And Threats) And Appraising Resources (strengths And Weaknesses)
Evaluating And Controlling Strategic Marketing
Strategic Marketing Planning Tools
Services Marketing And Not-for-profit Marketing
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