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Conclusion 26
E. References 27
A. Introduction
Maximizing long-term profitability comes from maximizing customer equity?firms must maximize the lifetime value of the customer, including revenues, referrals as well as costs of serving the customer. Customer acquisition and retention efforts must be guided by the worth of the customer to the firm.
Maytag provides premium service to its premium customers?those who purchase the Neptune line of laundry machines. Neptune customers get a dedicated staff, a separate toll-free number and fast response on service calls. This is an example of the common business practice where firms allocate resources by the profitability and value of the customer...
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