The article The Mis oversight of Customer Loyalty by Reinartz and Kumar talks about the importance of node verity and how the proper management of loyal customers can provide strong results to organizations . Loyal customers atomic number 18 generally believed to be the best customers as they cost little to serve , are usually willing to pay more than than other customers and or so of the time act as word of mouth marketers for an organization . Most companies today believe that winning homage would translate into profits . That is why corporate expenditures on obedience initiatives have increased to a large extent . For mannikin the top 16 retailers in Europe collectively worn-out(a) more than 1 billion in 2000 on truth initiativesHowever , research indicates that the payoff from these investments is not always as anticipate . One US high technology corporate service supplier set up a costing system to appreciate the effectiveness of its loyalty programs .
The system was quite comprehensive meter both the direct and indirect costs such as advertising , sales force and organizational expenses . The companion invested 2 million annually for five years in customer loyalty but the system they had implemented revealed that only half(prenominal) of the loyal customers generated a profit . About half of the most profitable customers were blow-ins they bought many high-margin products but in a pathetic time and then disappeared completelyThis article examines the dynamics of customer loyalty by using the customer databases of four companies . These include the high-tech service provider , a large US mail- company , a French retail food business...If you want to mother a full essay, order it on our website:
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