Customer perceived value and relationship marketing examples

customer perceived value and relationship marketing examples

Thus, customer perceived value is discussed by offering a review on the Therefore, by offering desired value to the customers, long-term relationship gained . do not meet the customer's needs and wants, the marketing strategy is defective. Customer Satisfaction; Customer Perceived Value (CPV); Customer service and marketing interpretations suggested that customer relationship management In definition customer satisfaction is known as key for achievement of goals in. However, relationship marketing has also brought a change to the practice of personal this is a fundamental strategy for their organisations, they have little or no of customer-perceived value of the relationship manager role in long-term.

The research design is based on quantitative research thus the data was collected through primary data, five Likert-scales and Spss 24 was used to compute results.

Convince sampling method was used in order to gather data. Different tests were applied to analyze reliability and validity furthermore it is recommended from this study that customer satisfaction, customer perceived value and CRM is key drivers to build customer loyalty. Lastly, this study discussed further ways which can be useful for future research. Previous research emphasize on the recognition of customer loyalty and factors that participate in customer loyalty [ 4 ].

One of the main reason behind it is the intense increase in the competition in this modern era. Although enormous research has been conducted on customer loyalty, there is still lack of literature that explains influential factors regarding customer loyalty [ 56 ].

Furthermore research is required to identify the mediating factors that enhance customer loyalty [ 67 ]. Previous studies highlighted the positive relationship between customer satisfaction and organizational performance [ 9 ].

Further review of literature suggested that customer satisfaction is positive step towards customer loyalty which leads to gaining more profits by the firms [ 10 - 13 ]. It is believed that customer satisfaction alone is not enough perpetuate for customer loyalty since customer satisfaction is conveniently anticipated whereas customer loyalty is much more complicated on enormous levels [ 1415 ]. Specifically more research is required to predict the variables that plays mediator to improve customer loyalty [ 6 ].

There is existing literature which suggests the simultaneous investigation of the service assessment variables such as customer satisfaction and customer perceived value, on depend variable; loyalty [ 716 ].

These service assessment variables are considered significant driver to gain loyalty of customers [ 7 ]. Thus, various researches suggested several key variables that can play a part of mediator among service assessment variables with constant of customer loyalty, the findings are still equivocal for different business sectors [ 16 ]. Moreover, various studies indicated that to promote customer loyalty the quality of customer relationship management CRM should exist to mediate in the relationship of customer loyalty apart from service assessment variables [ 17 ].

Literature Review In the present-day, many researchers speculate that service related component which have immensely prestigious effect on decision-making measures for the customer; these factors could be quality of the service, customer satisfaction and customer value [ 1518 - 20 ]. Nonetheless, by various researchers relationship between customer satisfaction and loyalty has been highlighted questionably that firms should not entirely rely on customer satisfaction as a key factor and exclusive antecedent for customer loyalty [ 2122 ].

However, still more research is required in order to discover the link of customer behavior with customer value. In earlier research, different studies conducted on service and marketing interpretations suggested that customer relationship management has significant role in developing and retaining the long term relationship with the customers. Additionally, customer satisfaction enhances the element of trust and assurance in the relationship with customers which is also considers the key driver for gaining customer loyalty [ 24 ].

Altogether the connectivity and depth of these variables are still uncertain [ 1525 ]. Customer Satisfaction In definition customer satisfaction is known as key for achievement of goals in service environment, it evolves around meeting and exceeding customer needs and demands [ 26 ].

The past studies have recorded the positive effect of customer satisfaction on dimensions of customer loyalty such as purchasing behavior, service consumption, duration of relationship and customer reference [ 16 ]. Customer Perceived Value Customer value is commonly consider as tradeoff between two parties, one party getting the financial value and the other party receive benefit by the consumption of products or services [ 29 ]. The perception of value is convolute as it is purely evaluated by consumers.

Hence, it is a customer who set standard and measure for product and service rather than supplier [ 30 ].

The customer values also rely on many other attributes which includes financial resources, knowledge about the product and location of the outlet or service center [ 23 ]. The development of strategies for creating customer value is a key to attract attention of new customers, develop and maintain a good relationship with them and for gaining customer loyalty [ 431 ]. Therefore, it is a common believe that by creating high customer value among the target customer there is a high possibility of enhancing trust and commitment which leads to gaining high customer loyalty.

Another researcher suggested that by improving customer relationship management quality in the firm, it can helps to obtain competitive advantage in the market place by promoting and retaining the element of trust and commitment among the customers [ 31 ]. Customer Relationship Management The theory of Relationship marketing RM recommended that customer relationship management is crucial component to create a sound relationship with customers, it eventually helps to achieve long-term commitment from the customers and assist to develop customer loyalty.

Furthermore the theory stated that loyal customers are proven to be more beneficial for business as compared to non-loyal ones [ 4 ]. The role of CRM is explained as an aspect of managing relationship between businesses and customers which includes various elements such as keeping contacts, positive communication and proactive procedure [ 32 ].

The basic role of CRM is to attract customers, build strong relationship with customers and successfully retaining the relationship for long run [ 33 ] ; planning the accurate customer segmentation and to find the effective mode of communication to target customers at the right moment [ 34 ]. The customer relationship management has quality to increase the chances of more profitability for the company as well as gaining maximum loyalty [ 32 ]. The two fundamental elements of CRM are trust and commitment and are considered exceedingly influential for developing and maintaining the strong connection between the firm and customers [ 18 ].

Different studies indicated the direct positive relationship among customer trust and customer behavioral response [ 36 ]. Similarly, the customers with strong trust and commitment levels are more likely to stay loyal with the firm.

Hence, it showed that commitment and trust are two factors which are positively related to customer behavioral intention [ 36 ]. This research focus on the two factors; trust and commitment those are responsible for customer relationship management. Additionally, these two elements have great significance as they promote collegial attitude which manage the accomplishment of relationship marketing [ 37 ].

Findings and discussion ACA findings The findings of both the semi-structured interviews and the ACA survey are presented in a conceptual model displaying customer expectations of software suppliers CRAMshown in Figure 1. They are shown in this model as numbers ascribed to arrows representing the weighting of each attribute in the mind of a customer. Overall, the CRAM provides a basis for measurement of customer-perceived value of business relationships in an industrial context, and provides a hierarchy of attributes from the customer perspective supported by deeper probing of the attributes by discussions with customers of the micro software firm.

All 12 attributes are discussed in further detail below and illustrated with statements from respondent interviews. Customer 6 Words that come to mind when thinking about the SME are reliable and high quality. Customer 10 However, the interview findings suggest that software customers have differing views as to what constitutes software quality.

Other descriptions of quality software products included software scalability, easy integration with other products, ease of use, and overall software design. Scalability, integration, and testing are tangible facets of software quality, but the ranking of other attributes suggests that physical product quality is not all that customers expect. The service and intangible aspects of quality, such as a relationship with the supplier and confidence in the employees, suggest that software quality is a combination of service and product quality: The opportunity to build a relationship with them.

This is important because if you have a good relationship with the company, you are a lot more likely to achieve your objectives because you can talk to them easily, they will understand you, you Parry et al. Customer 3 This corresponds with some of the studies exploring software quality concepts and supports the idea that the human element is necessary to achieve creation of quality software Hall et al.

The interview respondents identified a professional supplier as one which was reliable and was committed to following formalised processes e. The respondents indicated that their supplier was clearly working towards improving their project management procedures, but some customers remained reluctant to enter into large contracts without a larger partner to diffuse the risk: Their smallness does show through their written document skills, their approaches to project management.

Customer 13 If we entered into a big software development project, we would want to formalise the arrangements and we would want a formal structure. They understand what we are trying to achieve, they understand the way that we work and they bend over backwards to accommodate our wishes.

This is especially important when a customised software solution is under development, a view already supported by Helander and Ulkuniemi This also confirms the views of RM researchers who consider investment in long- term relationships as having a win—win outcome for both parties Gronroos, More specifically, software firms are required to develop an understanding of the end user and encourage customer participation in the dialogue, a finding which aligns strongly with the work of Isaac et al.

This is a product- related attribute, as it refers to the software product itself: In terms of this study, the majority of prospective and current customers in both the semi-structured interviews and online survey were IT managers with a clear idea about what type of software functionality they needed.

Can you work with the people, the company; can they fit into the culture of your organisation? You need to be able to get along as individuals. The interview respondents referred to after-sales service, which has been noted as a valuable dimension of B2B relationships Tyler et al. Customer 11 Parry et al. Customer-perceived value in B2B relationships The importance of this attribute is consistent with many studies within the B2B marketing realm Brennan et al.

In terms of software, service emphasises the importance of delivering a solution consisting of customer requirements definition, customisation, and post-deployment support, concurring with the work of Tuli, Kohli, and Bharadwaj In this case, there is an element of trust before the relationship has begun.

Openness, honesty, and communication also arose in the interviews as important constructs of trust. Price Many interview respondents identified that the price of software was a critical factor in the software decision-making process, as business customers are forced to work within tight budgetary constraints.

People need to be happy with the costs and how the company communicates the costs.

customer perceived value and relationship marketing examples

Customer 2 This further supports the need for regular communication and transparency of costs between the supplier and customer. Relationship The interviews indicated that customers view a long-term relationship with their software firm as an important expectation, but the ACA findings show that when faced with other options, more definitive factors become apparent.

Therefore these elements Journal of Marketing Management, Volume 28 have been identified as constituents of relationships in the software industry, as is confirmed by Barry et al. Therefore, we contend that although potential customers do not explicitly demand a relationship as a primary expectation in the software purchasing process, it remains an important attribute which is linked to attributes that customers do rate as being very important, such as understanding and professionalism Brennan et al.

This is consistent with the views of Helander and Ulkuniemi and Ruokonen who identified the development of relationships as important in the software industry.

Communication Although communication was not ranked highly in contrast to the other attributes, the qualitative findings indicated that regular communication among customers and their software supplier plays a key role in furthering the business relationship.

Therefore we assert that communication, like relationships, is intimately associated with other attributes that customers do value. These include the understanding of customer needs and trust, and are facets of communication also identified by Hall et al.

The bilingual factor is important. This indicates that despite the importance for some organisations in Wales of practising bilingualism, such as those within the public sector, they do not regard bilingual software capabilities as an essential requirement.

customer perceived value and relationship marketing examples

However, some interview respondents said that they deliberately sought out a local supplier, the main reason being the ease of interaction at short notice, which was deemed vital in developing a complex bespoke product: We were definitely after someone local who was within an hour or so distance from us, just to make the interaction between the customer and the supplier easier.

Customer 10 In some instances, the customer required software developers to work closely with in-house employees, which was made easier if they were in physical proximity to each other. However, it did not indicate whether any segments of respondents existed in the data.

Creating Customer Value

Any indication of groups or classes which would differ according to their decision- making criteria would be invaluable, as SMEs could thus tailor their marketing approach to varying segments. Therefore, a two-stage cluster analysis was undertaken based on the relative importance of the 12 attributes for each respondent, whereby a hierarchical clustering analysis preceded that of K-means clustering.

customer perceived value and relationship marketing examples

The hierarchical clustering procedure via the agglomeration schedule showed that a four-cluster solution best fit the data. Tests of between- cluster effects show that 10 out of the 12 attributes significantly discriminate between the four clusters.

Figure 2 illustrates the relative importance of each attribute in each cluster. The findings show that Cluster 1 prioritises service and employee expertise but is the cluster which is least concerned about price and location. In contrast, Cluster 2 regards price as an important attribute along with relationship, location, and bilingual capability. Cluster 4 is least concerned about a relationship but is the cluster most concerned about software quality. Cross-tabulations of the clusters against demographics of the respondent such as size of the firm and industry did not reveal any significant findings.

In order to verify the clustering, a Multivariate Discriminant Analysis MDA was applied to check whether the groups were correctly classified Hair et al. The sample was split randomly but ensuring an equal number of cluster membership in both the estimation and the holdout samples. The results are in Table 3 and shows that Attribute Mean square F value Sig. Understanding of the customer 6. Understanding of the Customer 8. The Press Q was The maximum Parry et al.

Customer-perceived value in B2B relationships chance threshold and proportional chance threshold were also calculated for both samples. For the estimation sample, the maximum chance threshold was For the holdout sample, the maximum chance threshold was In all instances, the hit ratio rates are substantially higher than the threshold values, indicating an acceptable level of classification accuracy. We therefore conclude that the classification accuracy of the analysis significantly exceeds the classification accuracy expected by chance.

Conclusion and managerial implications This study makes a contribution to the theory of customer-perceived value in B2B contexts by providing an insight into the attributes of value in relationships in the software sector, with specific reference to micro firms in this sector. A new CRAM is developed to represent the attributes of value in relationships from the business customer perspective.

The model was developed using ACA by embracing the views of customer firms of all sizes, but was informed by semi-structured interviews with customers of a micro software firm. Therefore, the CRAM is a practically useful tool for small and micro software firms, but is also applicable to other firms in similar industrial contexts, as it offers insights into the key customer attributes and their relative weightings. It can also be used by firms to plan in greater detail their approach to improving B2B relationships and business performance.

The ACA method is unique, as it forces respondents to make realistic trade-offs between attributes. This method could therefore be used with larger groups of customers in the future with the aim of advancing theory even further. This research also furthers the developing research in software marketing and, in particular, the issues for small and micro software firms in relation to the marketing of software.

However, there is evidence here to suggest that a more structured approach to marketing may offer greater opportunities for small software technology firms in the long term. On the other hand, the weightings placed on other service-related attributes imply that service quality is also highly regarded by customers professionalism of the software supplier, their understanding of customer requirements, and the opportunity to develop a long-term relationship with the supplier.

In essence, the inherent nature of software purchasing means that a human element in delivering the service solution is vital in achieving customer satisfaction Journal of Marketing Management, Volume 28 and strongly supports the need for development of fruitful, highly interactive relationships even for the smallest software organisations, even if it is not explicitly stated as a priority requirement. This is particularly relevant for customers in the B2B sector requiring customised solutions.

In view of the clustering results, future research should aim to ascertain what type of firm belongs to each cluster size, industry, etc. We have developed a model which is a useful starting point for small firms across B2B contexts.

However, when applied in different contexts, nuances of specific industries are likely to arise when investigating different sectors. Further testing and application of the CRAM in larger software firms could also be conducted to identify specific points of difference in the software industry as a whole, and longitudinal case study based research could also be carried out with organisations that have used the model to inform their practice. This study interviewed a diverse sample of customers, all of which had bought software from the same firm.

Thus future research should focus on differences among customers and their buying situations in the same industrial context. Software quality is clearly identified as important. However, there is evidence that there may not be a consensus on what constitutes software quality. Therefore, further investigation into this key concept from the customer perspective and other stakeholders is of specific interest to the software sector.

This work is instrumental in that it produces a set of criteria about what customers expect from a relationship with their supplier. Acknowledgements The authors would like to thank Professor Edward Shiu for valuable comments on an earlier draft of this manuscript.

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