Influences on Business Buyers

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Questions and Answers

What percentage more do loyal customers spend compared to new customers?

33%

How much more referrals can be expected from loyal customers compared to non-customers?

107%

How much more expensive is it to sell to a prospect compared to a loyal customer?

Six times more

What is one way in which loyal customers increase their purchases over time?

By increasing the volume of their purchases Signup and view all the answers

What type of loyalty is characterized by a positive commitment to a business?

Committed loyalty Signup and view all the answers

What motivates customers in the 'cost of change loyalty' category?

The cost, difficulty, or hassle involved in changing companies Signup and view all the answers

What type of loyalty occurs when customers have little or no choice in where they shop, often leading to dissatisfaction?

Monopoly loyalty Signup and view all the answers

What drives the 'habitual loyalty' type of loyalty?

Familiar routines and lack of time Signup and view all the answers

What are the building blocks of a committed relationship with consumers?

Communication, Competence, Customer orientation, Equity, Personalization, and Trust Signup and view all the answers

What type of loyalty involves incentivizing customers with rewards?

Incentivized loyalty Signup and view all the answers

What qualities are important to focus on when establishing a relationship with customers?

Expertise, Attention, Friendliness, Flexibility, Patience, and Superiority Signup and view all the answers

What is the purpose of loyalty cards and programs in businesses?

To increase customer loyalty and track purchases Signup and view all the answers

What are some benefits of loyalty programs?

Keeping the business's name in front of the customer, encouraging increased sales and return business, and providing valuable customer demographic information Signup and view all the answers

What are some drawbacks of loyalty programs?

Unless the reward is significant, the program may not stand out; unique offers can backfire; and loyalty cards can seem invasive Signup and view all the answers

What type of loyalty do loyalty cards and programs often create?

Loyalty based on financial commitment to the customer Signup and view all the answers

What is the main difference between loyalty programs offered by different businesses?

The specifics of the rewards and benefits offered Signup and view all the answers

What is the significance of acknowledging customers right away, and how can it impact a business?

Acknowledging customers right away creates a good first impression, which is crucial since it's the only chance to do so. This sets the tone for the customer's experience and can lead to customer loyalty and retention. Signup and view all the answers

How do customer surveys contribute to product development and customer retention?

Customer surveys help stay innovative in product development and increase customer retention by showing customers their opinions are valued. Signup and view all the answers

What are the benefits of following up with customers to inquire about their satisfaction?

Following up with customers helps ensure they are satisfied with their experience, which can lead to customer loyalty and retention. Signup and view all the answers

How can listening intently to customers impact a business, and what are some potential consequences of not doing so?

Listening intently to customers helps build trust and rapport, leading to customer loyalty and retention. Failing to do so can lead to customer dissatisfaction and a negative reputation. Signup and view all the answers

What is the purpose of building an online presence, and how can it contribute to a business's success?

Building an online presence helps increase visibility, reach a wider audience, and provide customers with easy access to information, ultimately contributing to a business's success. Signup and view all the answers

How can offering birthday specials and holding special events contribute to customer loyalty and retention?

Offering birthday specials and holding special events creates a positive experience for customers, encouraging loyalty and retention. Signup and view all the answers

What is the term used to describe the process of developing, nurturing, retaining, and maintaining relationships with customers?

Customer Relationship Management Signup and view all the answers

What is the key difference between a satisfied customer and a loyal customer?

A satisfied customer is happy with the service and products, while a loyal customer develops a connection with the company beyond the normal transaction. Signup and view all the answers

What is a characteristic of a loyal customer?

They are not price sensitive and become repeat buyers of your product. Signup and view all the answers

How do loyal customers contribute to the growth of a business?

They help sell the business with word-of-mouth marketing, without offering incentives. Signup and view all the answers

What is the main reason why loyal customers do not switch to competitors?

They have developed a personal relationship with the company and its representatives. Signup and view all the answers

What is the primary goal of customer relationship management?

To develop a continuing series of interactions and feelings of attachment between the company and the customer. Signup and view all the answers

How do satisfied customers differ from loyal customers in their view of the business?

Satisfied customers view the business as impersonal, while loyal customers view the business as a personal relationship. Signup and view all the answers

Why is customer loyalty important for business?

It leads to repeat business, positive word-of-mouth marketing, and reduces the likelihood of customers switching to competitors. Signup and view all the answers

What are the environmental factors that influence business buyers, and how do they affect buying decisions?

Environmental factors such as the level of primary demand, economic outlook, cost of money, technological, political, and competitive developments, as well as cultural and customs influence business buyers. These factors can affect buying decisions by making business buyers more willing to buy more and hold larger inventories of scarce materials, or by shaping their reactions to marketers' behavior and strategies. Signup and view all the answers

How do organizational factors influence business buying decisions, and what are the key components of these factors?

Organizational factors, including objectives, policies, procedures, structure, and systems, influence business buying decisions by shaping the buying organization's goals and approach to purchasing. These factors can affect the buying process by establishing procurement protocols and influencing the role of individual participants in the buying center. Signup and view all the answers

What role do interpersonal factors play in the business buying process, and how do they influence individual participants?

Interpersonal factors, such as the interactions and influence of individual participants in the buying center, play a significant role in shaping business buying decisions. These factors can influence individual participants by affecting their perceptions, preferences, and motivations. Signup and view all the answers

What are the individual factors that influence business buying decisions, and how do they shape participant behavior?

Individual factors, such as personal motives, perceptions, and preferences, influence business buying decisions by shaping the behavior of individual participants in the buying center. These factors can affect buying decisions by influencing the level of risk tolerance, empathy, and authority of individual participants. Signup and view all the answers

How do technological developments in the environment influence business buying decisions, and what are the implications for marketers?

Technological developments in the environment influence business buying decisions by making it possible for businesses to improve their operations and reduce costs. This can lead to increased demand for certain products and services, and marketers must adapt to these changes to remain competitive. Signup and view all the answers

What is the impact of supply conditions on business buying decisions, and how do shortages in key materials affect business buyers?

Supply conditions, including shortages in key materials, influence business buying decisions by making it more difficult for businesses to obtain the resources they need. This can lead to increased prices, stockouts, and changes in buying behavior, such as holding larger inventories of scarce materials. Signup and view all the answers

How do cultural and customs influence business buying decisions, especially in the international marketing environment?

Cultural and customs influence business buying decisions by shaping the values, attitudes, and behaviors of business buyers. In the international marketing environment, cultural and customs differences can affect the way business buyers respond to marketers' behavior and strategies, and marketers must adapt to these differences to remain competitive. Signup and view all the answers

What is the role of the buying center in the business buying process, and how do individual participants influence each other?

The buying center is a group of individuals who influence each other and make purchasing decisions. Individual participants in the buying center bring their own personal motives, perceptions, and preferences to the buying process, and they influence each other through their interactions and relationships. Signup and view all the answers

Study Notes

Major Influences on Business Buyers

Environmental factors:
- Economic environment (e.g. level of primary demand, economic outlook, cost of money)
- Technological, political, and competitive developments
- Culture and customs
Organizational factors:
- Objectives
- Policies
- Procedures
- Structure
- Systems
Interpersonal factors:
- Buying center participants influence each other
Individual factors:
- Personal motives, perceptions, and preferences

The Business Buying Process

Retaining existing customers through customer relationship management
True customer loyalty is a continuing series of interactions and feelings of attachment between the customer and the company

The Difference Between Repeat Buying and Customer Loyalty

Satisfied customers:
- Happy with service and products at the moment
- Will switch to a better option
Loyal customers:
- Involved with the company beyond the normal transaction
- Forgiving of minor problems
- Not price sensitive
- Repeat buyers
- Help sell the business through word-of-mouth marketing

Why Loyalty is Important for Business

Loyal customers spend 33% more than new customers
Referrals among loyal customers are 107% greater than among non-customers
It costs six times more to sell something to a prospect than to sell that same item to a loyal customer
Loyal customers provide many benefits, including:
- Purchasing products over and over again
- Increasing the volume of their purchases
- Buying across product lines
- Referring others to the business
- Giving the business the benefit of the doubt when something goes wrong

Why Consumers are Loyal

Five reasons:
- Committed loyalty (positive commitment to the business)
- Cost of change loyalty (difficulty or hassle of changing companies)
- Habitual loyalty (repeat business due to familiar routines)
- Incentivized loyalty (loyalty programs and rewards)
- Monopoly loyalty (little or no choice in where to shop)

Building a Committed Relationship with Consumers

Based on the following building blocks:
- Communication
- Competence
- Customer orientation
- Equity
- Personalization
- Trust
Establishing a relationship requires:
- Expertise
- Attention
- Friendliness
- Flexibility
- Patience
- Superiority

Adding Loyalty Programs to the Repertoire

Pros:
- Keep the business name in front of the customer
- Encourage increased sales and return business
- Provide valuable customer demographic information
Cons:
- May not stand out among other programs
- Unique offers can backfire
- Loyalty cards can seem invasive
- Loyalty cards create loyalty based on financial commitment

Ten Easy Ways to Enhance Customer Satisfaction

Acknowledge customers right away
Conduct customer surveys
Follow up to inquire about satisfaction
Listen intently
Build an online presence
Keep in touch with e-newsletters
Make the purchasing process an experience
Offer birthday specials
Hold special events
Volunteer for a good cause

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Description

This quiz covers the various factors that influence business buyers, including environmental, organizational, economic, and individual factors.