Know-How Exchange : Student Questions

Well...airlines are not exactly the best example of profitability. Perhaps a better example of how increasing sales does not increase profitability.

Generically, profitability can be increased in a number of ways

Increasing revenue without increasing costs, which is done through raising prices, increasing sales without increasing indirect costs propotionately, acquiring profitable companies.

Decreasing costs without impacting your ability to compete. That, for instance, is the premise behind things like supply chain management--once the breakeven point is reached on the investment.

Customer loyalty is another area for sure . . . by increasing the lifetime customer value of a customer.

All general answers of course and perhaps obvious as well.

I agree with the above replies, it is a very broad topic. And for relevant answers, you should narrow it to the field you're working in, or at least specify if it is services or goods your company specializes in, because depending on this info, we different marketing instruments can be offered.

So I will not go into details how to build customers' loyalty for this or that sector, but I will give only one thing that has the strongest impact on every customer, in every sector: consistency in quality.

Examples: (i) If I like the clothes from Paul & Shark, I never had any complains about their quality, I enjoy wearing them, and I accept the prices for these products - I will buy Paul & Shark clothes all the time. (ii) If I know exactly what I can buy in McDonalds and in any country (with the most alien for my stomach food!!) I will go there and buy something that I'm sure how it tastes - I will prefer it to any other fast food chain where I'm not sure what I can receive. (iii) If I used several tourist agencies and at one of them I always received good services at good prices and I never had any problems, comparative to other agencies - I will use their services with pleasure again and again.
All these, and many other examples, indicate that customers’ loyalty is the most sensitive to quality of services/goods/works, and - which is more important - to stability of this quality. When the customers know what they pay their money for, and if they agree that what they purchase is worth this money - they will be happy to stay loyal to this or that brand.

I consider myself a loyal customer. I can buy goods or services from different producers, to compare them and select the best. Once I have found something that fully satisfies me in terms of quality and its consistency, and sure if it meets my payment abilities - I will stay loyal to this brand.