ADM 3322 Lecture 21: Chapter 12 Managing Relationships and Building Loyalty
24 Feb 2016
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Tuesday, december 1, 2015. 12. 1 the search for customer loyalty. Why customers are more profitable over time. Why customer loyalty is important to a firm"s profitability. Customers become more profitable the longer they remain with a firm: Increase purchases and/or account balances. Customers / families purchase in greater quantities as they grow. Fewer demands from suppliers and operating mistakes as customer becomes experienced. Lecture 21 - chapter 12 managing relationships and. Positive word- of- mouth saves firm from investing money in sales and advertising. Long- term customers willing to pay regular price. Willing to pay higher price during peak periods. Assessing the value of loyal customer. Must not assume that loyal customers are always more profitable than those making one- time transactions. Large customers may expect price discounts in return for loyalty. Revenues don"t necessarily increase with time for all types of customers. Determine costs and revenues for customers from different market segments at different points in their customer lifecycles.
