MKT 300 Lecture 6: Lecture 6
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Outline: relationship marketing, customer profitability, customer lifetime value. What are the customer benefits of loyalty: confidence benefits less risk of something going wrong, less anxiety. Recency and counting customers: defining customers , recency qualifies the definition by considering the last time the person made a purchase, and should also consider general purchase frequency. If someone bought a shirt from h&m in 2013, is that person still a customer: what if, instead, that person bought a car from your dealership in 2013, recency varies in industries grocery retailers vs. home improvement. Example: world of warcraft, an mmorpg, requires gamers to subscribe to the service. In q2 2014, they had 6. 8 million subscribers. In the previous quarter, q1 2014, they had 7. 6 million subscribers. Percentage change = (new old)/old: = (6. 8 7. 6) / 7. 6, = - 0. 8 / 7. 6, = -10. 5% What is our retention rate: 89. 5% (q2 / q1) Customer profitability: (a more informative metric that incorporates retention)
