Economic benefits of customer loyalty often explain why one firm is more profitable than a competitor.However, profitable revenue streams are unlikely to apply equally in all industries.Long-term customer value is less likely to be significant when:
A)there are low margins on sale
B)there are high margins of sale
C)high marketing costs are required to obtain a new customer
D)there is a high sales volume per customer
E)there is a high word of mouth referral

Question

Quizplus · Accepted Answer

Long-term customer value is less likely to be significant in industries where there are low margins on sale because the profit generated from each sale is minimal, making the accumulation of profit from a loyal customer less impactful compared to industries with higher margins.

Economic Benefits of Customer Loyalty Often Explain Why One Firm