Description

Given the commoditized nature of many markets today, does customer relationship management and its associated focus on quality, value, and satisfaction make sense? If price is the only true means of differentiation in a commoditized market, why should a firm care about quality? Explain. One of the common uses of customer relationship management (CRM) in consumer markets is to rank customers on profitability or lifetime value measures.

Highly profitable customers get special attention, while unprofitable customers get poor service or are often “fired.” Is differential treatment based on customer loyalty justifiable? If so, what are the arguments for allocating certain privileges to repeat customers ? J.D. Power and Associates (www.jdpower.com) is a well-known research company specializing in the measurement of product quality and customer satisfaction. Explore their website to look at their customer satisfaction ratings for a number of industries. How do their ratings for a service such as a health club compare to the measures of expectations and performance for a hypothetical health club in Exhibit 10.9 (Attach)? Most of all, what is the role of customer satisfaction in driving customer’s loyalty, commitment, trust and improving the overall quality of relationship between the company and the customer?