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The Lifetime Value of a Loyal Customer

by Margaret Leitch Copeland and Susan Gimilaro
September/October 2010
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Article Link: http://www.childcareexchange.com/article/the-lifetime-value-of-a-loyal-customer/5019530/

How are parents who are five minutes late treated in your center â€" as criminals or as valued lifetime customers?

Is a parent who is laid off treated as an automatic farewell or as an ongoing parent whose tuition is paid for through the hardship fund or bartered for other services?

Are parents whose children graduated from the program taken off the e-mail list or recognized as permanent marketing champions receiving regular communications?

In The Service Profit Chain, Harvard Business School professors James Heskett, Earl Sasser, and Leonard Schlesinger (1997) offer two anecdotes â€" from Domino’s Pizza and a Dallas Cadillac dealership â€" that illuminate the concept of valuing a lifetime customer. Experts estimate that the lifetime value of a loyal Domino’s Pizza customer is $4,000 and a Dallas Cadillac customer is $332,000. In other words, far more than the day-to-day service or the individual pizza or car purchase. The authors note that these figures only represent the direct value of a lifetime customer and do not factor in the “value of referrals associated with satisfied customers” (p. 65).

Responding to valued customers

Have you calculated the lifetime value of a loyal child care customer family in your program? Would parents be ...

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