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Entries for April 2012

2011 CAPE Conference Intro Debbie Collard 2010 CCE Chairman of the Board

2011 CAPE Conference Awards Recognition Lunch Introduction by Debbie Collard 2010 CCE Chairman of the Board 

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2010 CAPE Volunteer Recognition Awards

2011 CAPE Conference Awards Lunch CAPE Volunteer Recognition Awards

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2009 CAPE Award Winner Videos

Prospector Award Winner Marina del Rey WorkSource Center CAPE Prospector Award Winner Los Angeles Urban League Cape Bronze Award Winner Communit...

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The Economics of Customer Loyalty

This article is part of an on-going series on Customer Loyalty and Customer Satisfaction

Profitability is correlated in a positive way with customer loyalty. While we have confirmed this with empirical evidence for a variety of clients in a wide range of industries, it is interesting to consider why the relationship should exist. Exhibit 1 show below summarizes the reasons. First, simply keeping a target customer longer means the cost of churn, or replacing lost business with new business, is reduced. While Exhibit 1 depicts a relationship with a single customer, the same principle applies to portions of large business customers. Time and again, we have seen companies managed for market share, which gain share only by incurring great churn. These companies tend to realize a lower average price and have a higher delivered cost than their competitors with lower rates of churn – even if the competitors have a lesser share of the market. Customer acquisition cost, while not ordinarily accounted for by the finance department, can be significant. Improving customer loyalty reduces the significance of this cost of poor quality.

A variety of extra “chunks” of value accrue as a customer’s loyalty level increases. These are shown in Exhibit 1: profit from referrals; profit from price premium; profit from broadened purchasing; profit from co-development of products & services and profit from reduced operating costs. In theory, the relative size of these value drivers can be measured. In practice, we espouse only some simple analysis to make the case for customer loyalty management, and tend to focus our efforts and the attention of management on the practical aspects of managing for loyalty. As has been mentioned,…

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New Business Plan, New Funding Help Baldrige Program Move Forward

The Baldrige Performance Excellence Program (BPEP), managed for 25 years by the National Institute of Standards and Technology (NIST) in collaboration with the private sector, has announced that it is transitioning to a new business ...

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New Business Plan, New Funding Help Baldrige Program Move Forward

The Baldrige Performance Excellence Program (BPEP), managed for 25 years by the National Institute of Standards and Technology (NIST) in collaboration with the private sector, has announced that it is transitioning to a new business ...

Read More

New Business Plan, New Funding Help Baldrige Program Move Forward

The Baldrige Performance Excellence Program (BPEP), managed for 25 years by the National Institute of Standards and Technology (NIST) in collaboration with the private sector, has announced that it is transitioning to a new business ...

Read More

New Business Plan, New Funding Help Baldrige Program Move Forward

The Baldrige Performance Excellence Program (BPEP), managed for 25 years by the National Institute of Standards and Technology (NIST) in collaboration with the private sector, has announced that it is transitioning to a new business ...

Read More

New Business Plan, New Funding Help Baldrige Program Move Forward

The Baldrige Performance Excellence Program (BPEP), managed for 25 years by the National Institute of Standards and Technology (NIST) in collaboration with the private sector, has announced that it is transitioning to a new business ...

Read More

New Business Plan, New Funding Help Baldrige Program Move Forward

The Baldrige Performance Excellence Program (BPEP), managed for 25 years by the National Institute of Standards and Technology (NIST) in collaboration with the private sector, has announced that it is transitioning to a new business ...

Read More

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