How much is a customer worth? The answer is "Life time value". According to our textbook on page 22, Customer Lifetime Value is defined as the value of the entire stream of purchases that the customer would make over a lifetime of patronage.
To retain a customer worths much more and costs less than getting a new customer. The study shows that customers have good experience in a restaurant tells about 4~5 people but they tell about 8~9 people if they have bad experience. Therefore, creating customer loyalty and retention becomes critical in the Business market.
In the video, GM is banking on customer loyalty. GM ended up winning the autmobile manufacturing industry loyalty award. It is mentioned in the video that research showed 2/3 GM owers who needed a new one bought another GM vehicle. Three rules were suggested in car manufacturing industry to retain customer's loyalty: 1) Keep the quality of vehicles high. 2) Create excitement around the brands and models. 3)Keep rolling out the technology (ex: fuel saving, green technology..etc)
By following this rules, Chevrolet helps GM to retain customer loyalty, and by creating customer loyalty and retention, it creates customer lifetime value to a company.
TunChun (Crystal) Pan, Section G