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The success of Verizon Wireless in the market can be attributed to its ability to pinpoint customer needs and requirements which are overlooked by its competitors. The case points out the strategic advantages of Verizon allowing it to minimize churn while increasing its overall shares in the market…
These are its high quality nationwide wireless network, technological choice of CDMA instead of GSM, constant monitoring of its products and services, and provision of the best product to the customer through an automated software which analyzes customers' calling habits.
The company's investment in building a system which takes into consideration the customer service capabilities and coverage has important implications on the company's long-term cost structure. Through these investments, the company is able to provide the best for its clients thereby minimizing churn. The case states that customer loyalty is very important as the acquisition of a customer totals to $300 to $400 each and it takes six to eight months before this cost of customer acquisition is recouped by a business organization. Thus, when a customer stays longer in a service provider, this will mean that the cost of acquisition is covered while the company will not be spending so much in order to acquire new ones. Loyalty also has important implications for a company. If customers are loyal, they tend to spread it to word of mouth allowing the companies not to spend too much on other promotional activities like television advertising. This, in time, reduces the acquisition cost for a business organization. ...
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