Differentiating Customers Some Customers Are Worth More...

Chapter Overview: Differentiating Customers: Some Customers Are Worth More than Others This chapter discusses the value of a customer. It indicates that customers have different and distinctive actual values, potential values, which lead to their lifetime values. It is important that a company understand first, and foremost that the only reason that they are able to make a profit is because of their customer base. However, it is also important to realize the cost to serve a customer and to know how much value they bring to your business and if in fact they cost the company more to serve them then they spend. Companies are increasingly trying to enter and foster learning relationships with customers. Building these intimate relationships with customers helps a business learn many things. They learn about their reputations and how well they are meeting market demands, and how satisfied customers are with their treatment. Beyond this, by building a personal relationship with a customer, they begin to find out how much value that customer will bring to them over their lifetime. They also learn how to develop potential of those that are not bringing enough value to the company. Possibly, there is a way that the business can interact with that consumer to help change the financial path they are following. One controversial topic regarding knowing a customer’s actual net value is when that value is below zero. More and more companies are working to help thoseShow MoreRelatedZara Casestudy983 Words   |  4 Pages the homogenization of consumption patterns across countries. Answer 2: While Zara controls its entire production chain, Gap Inc and Hamp;M outsource all their production. Zara’s vertical integration enables the firm to have a faster turnaround than its competitors. Product and geographic diversification has been used by the three clothing brands as their main directions for growth. 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