Explain the three basic strategies for customer-based objectives

What will be an ideal response?

• Customer Acquisition (Getting Customers): Different types of companies adopt different types of customer
acquisition strategies to adapt to the needs of their particular market. Whether the company acquires new
customers using market penetration methods (like capturing competitors ' customers) or market development
methods (like selling existing services to a new group of customers), companies must ensure that customers value
their offering, or they will not be successful.
• Customer Retention (Keeping Customers): Having acquired the customer, companies use customer retention
strategies to keep them. Retention is not just a question of keeping customers; it is of keeping the right customers.
Spending large amounts to keep unprofitable customers rarely makes sense. To increase customer focus while still
maintaining profitability, companies must realize that different customers have different customer lifetime values
(the total profit resulting from the business relationship with the customer over their lifetime). As a result, many
companies employ customer tiering to rank their customers according to their customer lifetime value.
• Customer Revenue Growth (Growing Customers): Retaining customers helps keep customer lifetime value;
growing customers increases it. Customer revenue growth strategies typically involve increasing their lifetime
(introducing them to the product or service earlier to extend the relationship), increasing the amount of revenue
generated from every customer interaction (like super-sizing), or extending the company's value proposition to
provide an array of products and services that customers appreciate. Customer relationship management (CRM)
software helps grow customer value by capturing customer preferences so companies can tailor value-added
products and services to them.