MKT 723 Lecture Notes - Lecture 8: Customer Satisfaction, Loyalty Program, Switching Barriers
Document Summary
Targeting, acquiring, retaining the right customers is at critical if firm"s wants to function successfully. Higher purchases, share of wallet and cross-buying. Profits are derived from reduces customer costs. Customers are using self serve options at checkout. Databases keep track of customers preference to process orders automatically, without the use of employees. The cost of obtaining a new customer can be divided over a over longer periods. It is 6 to 7 times more expensive to acquire new customers than it is to keep a current one. On average, loyal customers are worth up to 10 times as much as their first purchase. Caution: on assessing the value of a loyal customer. Sometimes a one time customer can be more profitable than a loyal customer. Profits do not increase with time for all types of customers. A customer may be loyal to a brand, but it doesn"t mean they need the product at the current moment.
