Consumer Lifetime Value

Introduction

Babin & Harris (2015) have written a great book about different aspects of consumer behavior. This text appealed to me in different ways. First is that it let me understand my personal behavior when I am involved in the purchasing of a product or service. Usually, we do not know the psychological and social factors that are active in being a consumer. After reading this text, I have come to understand that there consumer behavior is a product of specific marketing strategies, the set of our needs and wants and many social and financial factors. There were man topics that I like which are discussed in the text. If I had to choose two topics that appealed to me the most, I would say they are Consumer Lifetime Value (CLV) and the human side of the consumers that is researched by consumer behavior experts. Following is a brief account of why these topics are of importance to me.

Consumer Lifetime Value (CLV)

I didn’t know that how the importance of a consumer is assessed by businesses. In fact I didn’t even think that companies might be differentiating between their customers. I thought that companies would have large databases of customers that they ever dealt with and all would be treated equally. Then I came across the topic of CLV. I realized that the situation is the opposite of what I think. Companies keep the records of their customers in accordance to the level of their loyalty. So for example if I visit a store for 10 purchases while another of my friend visits the store for just two purchases, I would have a better CLV compared to my friend. I believe that this is the reason I have got gift packages from some companies while never remembered by others. The concept seems to me just like emotional attachment to family and friends. If you are frequently meeting a member of your family and have good time spent with them, you would be more like by them compared to other family members and you should expect a good gift from them once in a while.

CLV has emerged as a tool to retain loyal customers by offering discounts and other promotions. This makes me think if I should just stick to a few companies and make frequent purchases at their store? I guess this will add me to their good books. Especially this strategy could be useful in practice when dealing with travelling agencies. They would then be offering free meals and discounted travel and hoteling in return to my loyalty.

Human Side of Consumers                                                

Researching and understanding consumers as individual or groups has also become a great way of assessing their purchasing behavior effectively. I personally used to have emails from the brands that I shop at about filling out customer surveys each time I made a purchase. I didn’t know why they keep asking questions about my personality and behavior. It all seemed therapeutic to me.

After I have been through this course, I have realized that companies has incorporated inferences drawn from customer feedback into their production processes and the items that are produced are responsive to consumer purchasing behavior.

Conclusion

I would like to conclude my discussion accepting the fact that consumer behavior course at Adams has broadened my view about how different businesses treat their customers and how they involve these customers in order to make their businesses more productive and profitable. I hope that I would get a chance to conduct some kind of research in the future in the field of consumer behavior.

References

Babin, B. & Harris, E. CB7, 7th Edition.