VIEWS: 7 PAGES: 1 CATEGORY: Engineering & Energy POSTED ON: 5/22/2010
The University of Pennsylvania's Wharton School marketing professor Jagmohan Raju and John Zhang, and Wharton doctoral student Upender Submaranian have found that the all-too common CRM practice of hiring low-value customers may actually decrease firm profits, and that even trying to increase the value of these customers may be counterproductive. The conventional wisdom is that low-value customers, the scofflaws who don't spend all that much money on your services or products but who are always on the phone with questions and complaints, are net losses which, if they can't be upgraded, should be axed. Because hey, after all, they may be slugs, but they are your slugs.
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