The most valuable customers
Definition
Most valuable customers are a marketing term referring to the customers who are the most profitable for a company. These customers buy more or higher-value products than the average customer. The companies can provide these customers with advice and guidance to make them loyal.
In the RFM analysis scenario, Recency or frequency will not be sorts out most valuable customer by themselves alone. The recency measures who made the purchase most recently, and the frequency measure the intensity of a customer’s relationship with Cheers’ business. And good customers, by definition, do business with Cheers more often. The monetary in RFM adds another level of detail to the customer picture, helping our team
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And they are showed in the Figure 1. They are the most valuable customer for Cheers.
The most responsive customers
Definition
There is something about people’s psychology that makes them more likely to open your envelope and act on what is inside if they have recently had a satisfactory transaction with you. This will make the recency value-scores to be the most important predictor of who is more likely to respond to a next offer. Recency score is calculated based on the date of their most recent purchase. The scores are generally categorized based on the values.
In the Cheers’ scenario, customers who have purchased recently from you are more likely to purchase again from you compared to those who did not purchase recently. As a result, we will use the recency value-scores to determine who the most responsive customers are.
Data Result
Base on the definition above, there are 2399 customers with the all five value-scores for recency, and our team sorts them by their accurate recency in the Figure 2. They are the most responsive customers for
According to Business Studies ‘’Customer service is one of the most important ingredients of the marketing mix for products and services. High quality customer service helps to create customer loyalty. Customers today are not only interested in the product they are being offered but all the additional elements of service that they receive from the greeting they receive when they enter a retail outlet, to the refund and help that they receive when they have a complaint about a faulty product that they have paid for’’ (Business Studies, n.d).
One of the highest loyalty scores in the industry, with a redemption rate under the industry average; and
Customer Value is a very important factor to all businesses let along business that supply products or services to the public. Value is relative to each individual customer but many researchers have found a simple way of defining customer value. Customer value equal the result produced for the customer plus process quality divided by the price to the customer plus the costs of acquiring the product (McMurrian & Matulich, 2016). The customer must purchase the product or service and experience it for the company to be able to benefit from the feedback. The four mechanisms within customer value, the results, process quality, price and customer access cost, are all very important for a company to understand in order to fully understand customer value.
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
Next they have to design a marketing mix that captures the attention of those customers. Marketers would also have to create and maintain a good relationship with the customers. It is a matter of the utmost importance as research has shown that most buying is repeat-buying. Customers are likely to continue purchase and even become brand evangelist if they feel connected to a company. (Lawson Hembree's blog 2011)
Superior customer value: strategies for winning and retaining customers (3rd ed.). Boca Raton, FL: CRC Press.
Successful businesses understand the importance of customer lifetime value (CLV). They know that if they increase CLV, they increase the returns on their marketing dollar.
Companies are trying to become more market driven and their major efforts go in retaining customers. Customer retention has become much more important than customer attraction because attracting new customer costs five times more than pleasing an existing one. (Kotler, Marketing Management Millenium Edition, 2002).
Many scholars believe that customer satisfaction has a crucial role in the success of a business, and is pivotal in increasing the overall profitability of the business (Kotier, 1991). Customer value is gained through the experience they receive from the goods or purchases they have obtained from a certain business. Customer value has various definitions and concepts, Holbrook (1999) stated that it is a kind of “interactive, mutual, and preferred experience”; but simply said, “the term customer value has many meanings.”
Customers: They are highly influential as they are the central point of every business. Success of business largely depends on identifying the need, desire, tastes liking etc of a customers.
The more profitable firms are those that are able to maintain their most valued customers throughout time. To satisfy a customer means to make him faithful and customer satisfaction becomes the index that measures the ability of the firm to produce income for the future.
Richards, K., & Jones, E. (2008). Customer relationship management: finding value drivers. Industrial Marketing Management, 37, 120-130.
Customer relationship management has become the marketing buzzword of the past two decades, with business-to-business firms jumping in, many without really being certain of what they hope to achieve from it, and oftentimes being disappointed with the results. Gummesson (2004) describes CRM as "the values and strategies of relationship marketing with particular emphasis on customer relationships- turned into a practical application. " CRM has become a necessity to successfully and profitability manage customers and a firm’s relationship with them, with the market reaching a value of approximately $11.5 billion in 2002. Xu et al. 2002). The 'Secondary' of the 'Secondary' of the 'Secondary' of the 'Secondary' of the 'Second
There are many description and theory of customer loyalty. We should research and compare which theory is suitable for our business.
Lawfer, M., R. (2004). Why customer come back: how to create lasting customer loyalty. United State of America: Career Press.