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Customer Value, Satisfaction and Loyalty at Uber

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 2490 words Published: 16th Dec 2020

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Executive Summary

The purpose of this assignment is to explain the relevance of customer value, satisfaction and loyalty and how those concepts jointly contribute to achieve the company's goals in order to place them in a privilege place of the market and let them be successful. Additionally, it will be explain how a company manage its relationship with customers for which will be chosen Uber Company as leader in digital transport industry. It will be outlined how Uber has change its marketing strategy over the time due to changeable economic world in which is playing an important role. There will be some examples of different companies around the world to support the academics concepts covered in class and finally it will be possible suggest some ideas that Uber may implement to enhance its relationship with customer because it is a reasonable requirement of all companies to be successful.

Table of Contents

  1. What represent Customer value, Satisfaction and Loyalty in Marketing Management?
  2. What is the importance of customer value, satisfaction and loyalty in the success of a company?
  3. Customer Relationship Management in Uber
  4. Conclusions and Recommendations
  5. References

1. What represents Customer Value, Satisfaction and Loyalty in Marketing Management?

The relationship among those three concepts is close associated with customers’ perceptions about what they are expecting of a determined product or service and the monetary cost paid for it. Based on this fact, companies’ marketing departments build their strategic plan to enhance and strengthen customer value, satisfaction and loyalty. “Customer value is the difference between the prospective customer’s evaluation of all the benefits and cost of an offering and the perceived alternatives” (Kotler & Keller, 2016), on the other hand it is satisfaction, which simply is how a buyer if a feels after a purchase was done, if the action meet the person’s expectations, the level of satisfaction is good, otherwise it will be low level, however due to there are people involve in this concept, all the results are relative because human perceptions about satisfaction is always unpredictable, that is the reason marketing studies about fragmentation is vital in a successful  strategy. In addition to efficaciously achieve the companies’ goals, is quite important as well, work on strongly retain customers, make them feel satisfied with the brand, let them have perfectly clear that their investment is placed in the most suitable way, this is called loyalty, and in order to match those three factors, companies develop different methods of building value, satisfaction and loyalty.

Nevertheless these concepts as variables play a critical role into the marketing game, each one has different relevance into the business but all jointly aim to attain customer loyalty. In the marketing flow, customer satisfaction and customer perceived value are the drivers of customer loyalty, in simples words the existence of an effective relationship between these two variables or factors and even the organizational performance constitute a key motivators for consumers to become loyal to an specific product or service. After all, customer loyalty will always be a driver to increase profit levels and enhance the financial company performance.

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The best sample of this assumption is Apple, this company has created a solid monopoly due to the quality of its products, technical support and even fashion, but whatever Apple has built this strong connection with consumers, the customer loyalty developed has been extremely successful. As a result of this action, Apple has currently valued for approximately one trillion of US dollars and its net revenue for the past quarter was $9.55 billion (Salinas, 2018), these numbers simply represent the influenced and power of loyalty, let see, if a customer believes the product (in this case Apple) that is buying is high quality, its feeling about the investment is safe and automatically its perceptions about the purchase will be positive. As a general conclusion, loyalty represents the result of a well developed marketing strategy in which customer value is prioritized over many economics factors and the customers’ satisfaction importance is constantly evaluated by the company in order to improve the strategic plan and achieve the expected profits levels.

2. What is the Importance of Customer Value, Satisfaction and Loyalty in the Success of a Company?

The challenging journey of a company after the launching has good and bad moments, which normally are known as successes and failure, it is vital to any company aims to be successful but in fact this is not always attainable and neither sustainable, though the real true is that the journey is unpredictable because everything is continuously changing and a large numbers of variables are constantly influencing on the business as well. Nevertheless, the success in a company occurs basically when a they achieve its strategic objectives and it is close linked with their profitability, after all the gold rule of any business is to generate revenue by being as productive and effectiveness as possible but also by diminishing expenses in order to gain more revenue and be much more profitable. Yet, this point of view is net financial because as it was previously mentioned the journey toward to success is constantly changing, then it could affirm that nowadays a company is successful if it is well known brand or if its popularity in social networks is high, but it comes back again to the point the financial issue, without profit there is no success.

As a matter of fact, the Forbes magazine described 6 ways to measure success in a business based on the following priority order: financial statements, customer satisfaction, quantity of new clients added, conduct performance review, staying current on the market and finally the shareholders' perception about achieving for proposed expectations (Kappel, 2017). According to above sample of successful view, the relationship among Customer Value, Satisfaction and Loyalty, is fairly important in order to achieve the companies’ objectives, all these could be financial, operatives, socials and even politics, but truly those have to work jointly. This works as a balance in where one side is fit by economics and financials issues and on the other side there are plenty of customer needs but the complement to maintain success in the market is undoubtedly to having competitive and sustainable advantage and this is only possible when clients’ loyalty is strong enough to face rival threats and the constantly world change market by technology (Armstrong, Adam, Denize, & Kotler, 2012).

3. Customer Relationship Management in Uber

The term marketing relationship refers to “long-term, mutually beneficial arrangements in which both the buyer and the seller focus on value enhancements through the creation of more satisfying exchanges” (Pride & Ferrel, 2013, p. 15). This is exactly the most important objective of marketing; the more reliable information about buyer perceptions the more successful is the marketing strategy. Normally all the companies has two types of strategies, intended and realized, the first one is developed during the strategic plan building and the other one is the adaptation of the initial one due to the changeable social environment (Pride & Ferrel, 2013, p. 43) one suitable example of this discernable change in the strategic plan has been Uber, the company which was born just to meet the transportation needs of the citizens in California, US in 2008 but nowadays presents a generous offers of services around the almost 45% of the world and it is valued in more than 62 us billions ( Uber Technologies Inc., 2018).

By increasing customer value over time, Uber tries to retain and increase long-term profitability through customer loyalty by different ways. For instance, if a customer (rider) invites new riders by using a specific code, they get  $5,000 off each of next 2 rides when they start riding. Complementary, into the others services offered by Uber, is Uber eats which is growing pretty fast in New Zealand market specially for the high demand and the low levels of competition. The system simply consists to connect one person who needs a delivery with other one who is willing to take it, whole this process is manage through a digital application controlled by Uber. In the same way as Uber, Uber Eats enable user to connect each them, buyers pay a fee to Uber for the delivery and Uber pays another fee to drivers for the service. For this case, Uber eats offers another “promotion” in order to retain new clients which is quite similar to the mentioned one previously. Uber Eats provides a code for each user and if the users share this code with different friends, when they use Uber Eats for the first time, they will get NZ$10 off their order and the initial user will get NZ$5 off. The intended marketing strategy of Uber was completely different to the currently one, its easy life philosophy as to connect users around a need marked a significant difference. However when Uber first introduced in the transport market, they only focused in cars to move different people, but due to the fast raise of digital technology market, Uber innovated with new services and they realized the demand was as large that they would not need to retain their customers, this was almost a monopoly with the power of a wonderful innovator idea in a world eager of technology.

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Over the time, other competitors got into the business and additionally there were a large numbers of problems with other transport sectors such as taxi companies and even private companies because this was an unfair competition, therefore Uber had to change its marketing strategy and enhance its CRM. Obviously due to those serious problems, Uber has lost economic force in the market and the most curious fact; Uber has just implemented several promotions to strengthen customer satisfactions and loyalty. The visible face of the company to show good quality, great customer service, and place the brand on top, is the drivers because indeed customers are how respond positively if they are well treated and consequently the company will be good rated. Similarly how the company treats drivers, customer satisfaction indicator will be fairly rated. This fact is consequently important to achieve the company financial goals but in this case, this is a company that lack of tangibles assets in terms of drivers and riders, in other words, the question would be, how does the company interacts with its customers? Even though this is a huge company, spread out in many countries, the only channel to contact customer is e-networking, this is actually the foundation of the business and the operating working.

Uber has a special reward points program to enable users to collect a reward point for each new user invited, which can be redeemed for credit on the Uber account balance to be used in other ride. In addition, Uber uses significant marketing strategies to build costumer relationship, client loyalty and brand value, this company believes that to catch the public attention by investing large amounts of money in marketing and advertising represents a vital part of the process to loyalty their customers. Uber has an evident competitive advantage which enable them to be sustainable, for instance they was pioneers in the digital service transportation and they not just implemented services to make the user's life easier with reasonable and affordable prices but also invested in a navigation platform which is enough reliable to meet the drivers needs in order to provide a high quality service.

4. Conclusions and Recommendations

Uber strives to strengthen satisfying exchange relationship between drivers and riders, they always gather data at all customer to send massive emails with advertising and the system of rating to qualify the service is useful but they should get better this channel in order to please the users compliance. It was noticed about the CRM in Uber that they just implement few incentives programs to their customers and it is highly likely due to the poor services offered by taxi companies and even the delivery companies, however there are currently new digital companies that faces to this giant of the industry and taking advantage of their legal problems, they are establishing themselves in the market as strong companies such as Ola and Zoomy which is a local company that offers similar services as Uber, therefore it is essential that Uber get better their rewards programs as following:

They should improve their reward points program by giving a free ride for each 10 rides completed, because the current promotion is just when someone else use the code sent by the rider, so this is not a real customer retainer strategy. Moreover Uber should launch a credit card with specials attributions for users such as privileged fees, exchangeable points with other companies etc. Finally Uber has the obligation to improve the recruitment policy for drivers; one upside of Uber for drivers is to find easy the way to earn money which is good for the demand of the business but on the other hand they are jeopardizing the company’s image which always will be more valuable than the profit in a determined financial period.

5. References

  • Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2012). Principles of Marketing . Midland Typesetters, Australia: Pearson.
  • Kappel, M. (2017, March 8). Forbes . Retrieved December 1, 2018 from 6 Ways To Measure Small Business Success : https://www.forbes.com/sites/mikekappel/2017/03/08/6-ways-to-measure-small-business-success/#6857d3b918f4
  • Kotler , P., & Keller, K. (2016). Marketing Managment. Harlow, England: Pearson Education Limited.
  • Hennessey, R. (2012, August 2012). Forbes. Retrieved December 1, 2018 from 3 Reasons Why Starbucks Still Shines, Despite Market Shortcomings: https://www.forbes.com/sites/rachelhennessey/2012/08/06/3-reasons-why-starbucks-still-shines-despite-market-shortcomings/#7e146a0e1cd0
  • Pride, W. M., & Ferrel, O. (2013). Foundations of Marketing (Fifht Edition ed.). Mason, Ohaio, United States: Erin Joyner.
  • Salinas, S. (2018, August 2). CNBC. Retrieved November 30, 2018 from CNBC: https://www.cnbc.com/2018/08/02/apple-hits-1-trillion-in-market-value.html
  • Uber Technologies Inc. (2018, November 21). Uber. Retrieved December 1, 2018 from How Uber works : https://www.uber.com/en-NZ/about/how-does-uber-work/


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