Should You Punish or Reward Current Customers? Harvard Case Solution & Analysis

Many businesses face management dilemma, and expert views on the subject struggle. The authors argue that the answer to that question depends upon how customer preferences that are liquid are in a marketplace and to what degree some of the customers of a company are a great deal more valuable than others.

In markets where consumer preferences are exceptionally unstable and where the greatest-value customers are far more valuable than others, companies should focus on rewarding their finest present customers. Examples of industries in which this is the instance include car rentals and airlines. But if either or both of those two characteristics - customer shopping flexibility and attentions in customer worth - is not in place, then companies should focus on offering new customers their best prices. When identifying high-value customers, it is imperative to consider that profits and sales might not necessarily be correlated.

The authors note it is not just possible that high-volume customers are as valueless as they look, but, in certain settings, they could be downright unprofitable. The authors suggest several strategies to selectively increasing costs to all those customers and addressing the issue of unprofitable customers, including customer instruction.

Should You Punish or Reward Current Customers case study solution

PUBLICATION DATE: October 01, 2013 PRODUCT #: SMR461-HCB-ENG

This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE

Share This

SALE SALE

Save Up To

30%

IN ONLINE CASE STUDY

FOR FREE CASES AND PROJECTS INCLUDING EXCITING DEALS PLEASE REGISTER YOURSELF !!

Register now and save up to 30%.