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Market-Based Management 6th Edition by Roger Best
Edition 6ISBN: 978-0130387752Market-Based Management 6th Edition by Roger Best
Edition 6ISBN: 978-0130387752 Exercise 2
How could a repeat customer with a low lifetime value be more valuable than a repeat customer with a high lifetime value?
Explanation
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Verified
Repeat customer with a low lifetime value can be more valuable than a repeat customer with a high lifetime value if the former makes recommendations or referrals about a business or a company to new and potential customers. Owning to such referrals, a company may gain new customers and thus, can save big on marketing and advertising costs, which can be higher than the lifetime value of repeat customers.
Additionally, a company has the opportunity to convert or upgrade such new customers into loyal customers at a relatively lower cost than what it would have incurred to acquire new customers. Therefore, a repeat customer with a low lifetime value can be more valuable than a customer with a high lifetime value.
Additionally, a company has the opportunity to convert or upgrade such new customers into loyal customers at a relatively lower cost than what it would have incurred to acquire new customers. Therefore, a repeat customer with a low lifetime value can be more valuable than a customer with a high lifetime value.
Market-Based Management 6th Edition by Roger Best
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