To recognize the important role customer loyalty plays in driving a service firm’s profitability.
Tocalculate the lifetime value (LTV) of a loyal customer.
To understand why customers are loyal to a particular service firm.
To know the core strategies of the Wheel of Loyalty that explain how to develop a loyal customer base.
To appreciate why it is so important for service firms to target the “right” customers.
Targeting, acquiring, and retaining the “right” customers is at the core of many successful service firms.
In this chapter, we emphasize the importance of focusing on (desirable, Loyal customers Within the chosen segments and how to build and maintain their loyalty through well-conceived relationship marketing strategies.
The objective is to build relationships and to develop loyal customers who will contribute to growing volume of business with the firm in future.
ASSESING THE VALUE OF LOYAL CUSTOMER
It is a challenging task to determine the costs and revenues associated with serving customers to different market segments at different points in their customer lifecycles, and to predict future profitability.
Profit impact of a customer may vary dramatically depending on the stage of the service product lifecycle.
In this module, we understood the importance of customer loyalty in driving aservice firm's profitability.
We also touched upon as to how the lifetime value (LTV) of a loyal customer is calculated.
Next, we uncovered the reasons as to why customers are loyal to a particular service firm.
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