Profitable Customer Engagement: Concept, Metrics, and Strategies

摘要

It is quite some time since Peter Drucker said that the purpose of a business is “to create a customer” (1986, p. 47). However, in the present day context, where customer loyalty is fast becoming a hard-to-get proposition both in business-to-business (B2B) markets and business-to-consumer (B2C) markets, customer creation is simply not enough to guarantee sustainable profitability. It is imperative that businesses ensure that customers, who have made an initial purchase of the company's offerings, continue to repeat their purchase behaviour over time. Hence, conversion of a prospective customer into a profitably loyal one mandates that enterprises, whether small, medium or large, look beyond traditional market metrics in order to identify and retain existing customers who are profitable for them. Representing the interaction as Profits = ?[customer acquisition (CA) + customer retention (CR)], the potentiality of achieving CR needs to be guaranteed by managing customer perceptions in face of such forces as increased level of competition, customer idiosyncrasies, and technology-enabled networking among a company's stakeholders.