Hallmarks of Customer Franchise

20 years ago

By Marcia Kadanoff
  • Frequent buying which may occur at set intervals or based on individual consumption patterns.
  • Customer acquisition costs often exceed the initial revenue you get from that customer. 
  • Profitability depends on locking customers in for a certain time period and/or locking out competition.
  • Loyalty is rewarded with an “everyday” discount that is built into subscription- or volume-based pricing
  • Customers unwilling or unable to commit to volume and/or ongoing buying pay a substantial price premium.
  • Alternative vendors may crop up with offerings designed to appeal exclusively to customers unwilling or unable to commit to ongoing buying.

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