Marketing 101 Week 6 Lecture 6.

1 How can customer centricity be profitable ● Acquisition, retention and development ● Heterogeneity is celebrated ● Acquisition ○ Metric not to follow: CPA Cost per Acquisition ■ is a big mistake ■ customers are assets ■ the best is what you want not the cheapest ○ VPA: value per acquisition ■ CLV : how much am I willing to pay. Ceilings vs floors ■ there is hidden value to customers that we may not be aware of ○ Lecture 6.2 retention ● Metric: Turn rate/ attrition rate =customer loss ● what percent of customers stayed with us retention ● how long are the customer staying with us ● there is no average rate so one would have to look at how the attrition rate varies across customers ● Low attrition rate: loyal indifferent lazy ● THERE IS NO AVERAGE CUSTOMER ○ it will cause to understate the value of your customer base. ● efforts to boost retention are more modest than they appear Lecture 6.3 customer Development ● make the existing customer as valuable as possible ● getting people to buy more: cross selling, up selling & frequency ● Margin: pay more for the same product Lecture 6.4 part 2 of development ● How well developed is the firm in the customers mind/wallet ● The wallet metric: how many product do they have with firm ● share of wallet and size of wallet are not related Lecture 6.5 Wrap up ● Must have an updated projection on the lifetime value of the customer ● CLV and experimentation are essential ● it is not an overnight process Lecture 6.7 Take aways *retake notes 1. cracks in product centricity 2. it does not mean supper customer service

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