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Managing Customers for Profit
V. Kumar

Neil Kinnock’s quote - that loyalty is a fine quality, but in excess it fills political graveyards - may well apply to marketing too. “In spite of the overwhelming presence of loyalty programmes in virtually every industry, firms implemen ting them have tended to overlook certain important limitations, often to the detriment of company profitability,” writes V. Kumar in Managing Customers for Profit ( www.pearsoned.co.in). He cautions that misconstrued loyalty schemes can drain the marketing resources, rather than build long-term customer relationships. The relationship between loyalty and profitability is more complex than is often perceived, which explains why loyalty does not automatically ensure profitability. He advocates, therefore, the use of forward-looking metrics such as CLV (customer lifetime value) to generate profit by targeting customers who are actually going to add to the firm’s profit in the future. For an in-depth study.

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