HTH 102 Chapter Notes - Chapter 12: Customer Satisfaction, Loyalty Program, Switching Barriers

• School: Ryerson University
• Department: Hospitality and Tourism Management
• Course: HTH 102
• Professor: Christopher Gibbs

Document Summary

Chapter 12 managing relationships and building loyalty. Wh(cid:455) is (cid:272)usto(cid:373)e(cid:396) lo(cid:455)alt(cid:455) so i(cid:373)po(cid:396)ta(cid:374)t to a fi(cid:396)(cid:373)"s p(cid:396)ofita(cid:271)ilit(cid:455)? the longer customers remained with a firm, the more profitable they become. It usually takes more than a year to recover customer acquisition costs, and profits then increased as customers stayed longer with the firm: profit derived from increased purchases. Customers grow their purchases; increased family size, increased disposable income, higher salaries, etc. Think credit card growth in spending, stage of life: profit from reduced operating costs. More experienced customers require less time and cost to manage; use self-service, not time to set-up and train them. Think about less time spent on 2,3,4 year students at start of year: profit from referrals to other customers. Think about telling a friend or restaurant reviews: profit from price premium. New customers typically benefit from introductory promotional pricing.