Sales Myth: #4 – Customer Loyalty Is Important

 No Responses »  Tagged with: , ,
Jul 242011
 

Especially service providers invest a lot of money in customer loyalty programs, assuming that long-term customers are good for the company. Because of that myth, customer churn and customer retention have become key performance indicators with service providers; budgets and resources are allocated based on those figures and most marketing campaigns are set with the goal to keep customers as long as possible with the company’s services. This paradigm is so strong and unchallenged, it seems worthwhile to have a look at how well all this loyalty money is really spent. While it is certainly important to keep paying customers that contribute revenues to your company, this post focuses on the profitability that long-term customers … Read more

The Benefits Of Customer Satisfaction

 No Responses »  Tagged with: , , ,
Jun 192011
 

Customer satisfaction is valued highly in almost every commercial organization. Especially large firms spend an enormous amount of money on customer satisfaction programs. Therefore, an important question is: What are the benefits of customer satisfaction for the supplying company? A common assumption is that satisfied customers are more loyal in the sense that they stay in a longer relationship with the supplier. However, marketing research has proven that this linkage is not always so strong and that it largely varies by customer segment and industry. Therefore, vendors and service providers should not rely on such effect, also because the stand-alone value of customer loyalty is not very clear as I will outline in one of … Read more

How To Do Pricing Right: Price Promotions

 No Responses »  Tagged with: , , ,
Nov 142010
 

Customers typically use reference prices when making purchase decisions. It is very hard, if not impossible, for anyone to assess the absolute value of a product, service or solution. Therefore, customers compare the price with alternatives. Such alternatives can be other methods of solving the same problem or they can be competitive solutions from other vendors. But customers also compare prices with previous prices, special prices or standard list prices. Therefore, once you set the right pricing based on the value of your product, the question is if new customers can be won and revenue can be increased by offering price promotions (also called price frames). There is an interesting study by the US Office … Read more

Net Neutrality – Yes or No?

 No Responses »  Tagged with: , ,
Aug 082010
 

As rumored this week, Google and Verizon are close to reach an agreement that would allow Google web traffic to be prioritized by Verizon. Since carriers and network operators have been re-enforcing their activities to get Internet content providers like Google, Yahoo, etc. to pay for the usage of their network, the discussion on the so-called Net Neutrality has risen again. In general, Net Neutrality means that carriers, network operators or in general Internet access providers (and not, as often stated, mere service providers), which provide users access to the Internet, should treat all content equally in terms of access speed and load performance. (Note: To make my point clear, I will use the term … Read more

Cloud Selling

 No Responses »  Tagged with: , , , ,
Jul 172010
 

As mentioned in my very first post, the ways software is sold also has changed with SaaS and cloud computing. As some guys, like Oracle’s Larry Ellison for example, pointed out, delivering software as a (cloud) service has been around for quite some time. But now the difference is: SaaS or cloud computing is the predominant method of providing software and not just an alternative way. Nearly every decision on purchasing or upgrading business software (we are not talking operating system software here, not yet at least) will consider sourcing it as a service. But again, what is cloud computing? Have a look at the following video for a pretty good introduction. It is 4:52 … Read more

 Older Entries