6th Class Identifying Your Customers and Building Trust PDF

MGMT3069 Quality Service Management Semester 1 2024/2025 WELCOME! Mr. Antholon Jones Week 6 - Identifying Your Customers and Building Trust  Housekeeping Group Work Discussions Any Other Business  Quick Recap of Last Week…. ⭶ What is an encounter and a relationship? ⭶ What are the...

MGMT3069 Quality Service Management Semester 1 2024/2025 WELCOME! Mr. Antholon Jones Week 6 - Identifying Your Customers and Building Trust  Housekeeping Group Work Discussions Any Other Business  Quick Recap of Last Week…. ⭶ What is an encounter and a relationship? ⭶ What are the characteristics of Business Relationships? ⭶ Explain the difference between behavioral and emotional loyalty. ⭶ What are the 5 E’s of customer relationship? ⭶ What are the components of a good loyalty program?  WEEK 6 – LEARNING OBJECTIVES ✓ At the end of this class, you should be able to: 1. Explain and apply the IDIC model 2. Explain the importance of trust in building customer relationships and describe the trust equation 3. Explain the basic principles of 21st century trustability 4. Describe trust in the age of the internet 4 WEEK 6 – LEARNING OBJECTIVES 1. Explain and apply the IDIC model 5 Every Customer Is Different 6  Every Customer Is Different A business strategy based on managing customer relationships involves treating different customers differently In order for a firm to engage in the practice of treating different customers differently, it must integrate the customer into the company and adapt its products and services to the customers’ own individual needs 7  Every Customer Is Different It is customer information that gives the firm the capability to differentiate its customers from one another. Therefore information is an economic asset which if used properly can yield a return for many years 8 Every Customer Is Different 9 The IDIC Model It is a framework developed by Don Peppers and Martha Rogers for managing customer relationships in a systematic way. It is often used in customer relationship management (CRM) to help businesses build stronger, more personalized relationships with their customers. The model is designed to help companies understand and serve their customers better through four key steps: 10 11  The first step is to identify who your customers are. This involves gathering detailed information about them, such as their demographics, behaviors, preferences, and contact details. The goal is to create a comprehensive database of customers that can be used to tailor interactions. 12  After identifying customers, businesses need to differentiate them based on their needs and value to the organization. Customers can be categorized by their value (how much they spend or how profitable they are) or by their specific needs and preferences. This differentiation helps prioritize high-value customers and tailor services according to individual needs. 13  The next step is to interact with customers to learn more about them. This is done through meaningful communication, such as feedback, surveys, or regular interactions via multiple channels (in-person, online, social media, etc.). The more a business interacts with its customers, the better it understands their preferences and expectations. 14  Finally, businesses should customize their offerings and communications based on what they’ve learned through identification, differentiation, and interaction. This means delivering personalized experiences, products, or services that meet individual customer needs. Customization strengthens relationships and increases customer loyalty. 15 The IDIC Model 16 The IDIC Model 17 Activity 18 Activity 19 WEEK 6 – LEARNING OBJECTIVES 2. Explain the importance of trust in building customer relationships and describe the trust equation 20 Definition – Trust “ refers to the confidence that customers have in a company’s reliability, integrity, and ability to meet their expectations consistently. 21  The Importance of Trust Loyalty Customer Customer Competitive Customer Business and Advocacy Satisfaction Advantage Engagement Sustainability Retention 22 Definition – The Trust Equation “ is a formula that helps break down the key components of trustworthiness. It explains how different factors contribute to building trust, particularly in professional or customer relationships 23 The Trust Equation 24  The Trust Equation Credibility refers to the extent to which others believe in the words, knowledge, and expertise of a person or business. It is built through clear, accurate communication, being knowledgeable, and having qualifications or experience that make others feel confident in what you say. 25  The Trust Equation This is a more rational element of trust, focusing on how believable and reliable the person's or organization's information is. Example: A customer trusts a financial advisor because they have strong qualifications and give sound advice that proves to be correct over time. 26  The Trust Equation Reliability relates to how consistently someone or something performs over time. It’s about doing what you say you will do, every time. This is built through actions - regularly delivering on promises and being dependable. 27  The Trust Equation It is also a rational factor, based on actions that prove the person or company will follow through on commitments. Example: A company that consistently delivers products on time and offers dependable customer service builds reliability. 28  The Trust Equation Intimacy is about creating a safe, secure, and open relationship where people feel comfortable sharing their needs, concerns, or challenges. It fosters emotional closeness and a sense of personal connection. Intimacy develops when customers or colleagues feel they can give you with sensitive information and feel safe doing so. It involves empathy, confidentiality, and understanding. 29  The Trust Equation Intimacy is a powerful emotional factor that has a high impact on trust. When people feel understood and valued, trust is strengthened. Example: A client trusts a consultant who listens carefully, understands their unique situation, and maintains confidentiality. 30  The Trust Equation Self-orientation refers to the focus of a person’s or company’s actions whether they are more self-centered or client-centered. Trust decreases when self-orientation is high, meaning the person or organization seems more interested in their own needs, profits, or goals than those of the customer or client. 31  The Trust Equation This is the most impactful factor in the equation. High self-orientation reduces trust significantly, while low self-orientation increases trust because it shows the focus is on helping others. Example: A customer may lose trust in a salesperson if they feel the person is more concerned with making a sale than providing the best solution for the customer’s needs. 32  33 https://www.youtube.com/watch?v=XEB0qIy0XVc Activity – Apply the trust equation to an insurance sales person 34 WEEK 6 – LEARNING OBJECTIVES 3. Explain the basic principles of 21st century trustability 35 21 st Century Trustability Being trustworthy requires doing the right things, doing things right and being proactive 36 21st Century Trustability This means consistently acting with integrity and in alignment with ethical standards. It is about making decisions and taking actions that are morally and ethically right, even when no one is watching. Trustworthiness starts with making choices that reflect values such as honesty, fairness, and respect for others. It involves doing what is best for the customer, the organization, and society, rather than what is convenient or profitable in the short term. 37 21st Century Trustability Example: A company may choose to use sustainable materials in its products even though it might be more expensive because it's the right thing for the environment and future generations. Can you think of an example? 38 21st Century Trustability 39 21st Century Trustability This refers to being competent and delivering on promises. It means executing tasks efficiently, accurately, and with a high standard of quality. Trust is built when individuals or organizations consistently meet expectations and deliver what they promise. "Doing things right" means focusing on reliability and performance excellence in every interaction or service provided. 40 21st Century Trustability Example: A software company gains trust by not only providing the product it promised but also ensuring it works smoothly, without bugs or downtime, as advertised. Can you think of an example? 41 21st Century Trustability 42 21st Century Trustability Being proactive involves anticipating needs, problems, or opportunities and acting on them before they become issues. It is about staying one step ahead and showing that you care about the well-being of others. Proactivity demonstrates foresight and attentiveness, which significantly enhances trust. Rather than waiting for a problem to be pointed out or waiting for a customer to make a complaint, a trustworthy person or organization takes action to prevent or solve problems early.43 21st Century Trustability Example: A company that reaches out to clients to inform them of a potential delay in service and offers a solution before the delay happens is being proactive. This builds trust because it shows a commitment to transparency and customer satisfaction. Can you think of an example? 44 21st Century Trustability 45 WEEK 6 – LEARNING OBJECTIVES 4. Describe trust in the age of the internet 46  Trust and the Internet Whatever a company does – good or bad, will be spread at internet speed everywhere, immediately and permanently The ability to foster trust is now more challenging yet more important than ever, as the internet has made it easier to build large networks but also easier to lose credibility rapidly. Do you agree? 47 Trust and the Internet 48  Trust and the Internet Artificial Misinformation Fake News Intelligence Conspiracy Sensationalism Disinformation Theories 49 50  NEXT WEEK…The Value of Customers Kleenz Dry Cleaners has done a survey which shows that customers do not really trust them. Based on the 21st Century principles of trustability make specific recommendations to the managers to increase trust. 51 52