Researchers from the United States published new research in the INFORMS journal Marketing Science (Editor’s note: The source of this research is INFORMS), which sheds light on just how much it may take for the companies to profitably “steal” customers from their competitors. Frequently, the managers focus on customer acquisition cost when deciding if to poach customers from the competitor. To that extent, the managers may downplay the other factors, such as future cost to serve of poached customers. The researchers demonstrate that switchers can generate as much as 21 percent higher cost to serve as equivalent own customers. This brings an important caveat when designing marketing strategy.
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Source: Phys.org