Quote:
|
Originally Posted by Chrysalis
Well it is correct a business ultimate goal is to make profit otherwise why do business, but there are different ways of looking at it. Many companies will be prepared to make a loss to satisfy customers if it means profit in the long term. The other end of the scale companies that won't accept any type of loss ever, and expect each and every customer to turn them a profit.
Using banks as an example, when people go bankrupt etc. and default on their debts, these are examples of loss making customer's, now if the bank were to go anal on this they could turn around and say right we are going to stop offering loans because we cannot garantuee a profit on every customer and this would be insane. Another example is walkers crisps who I have worked for before, when their customer base gets below their target they will usually either add more product free ot knock something like 50% off the price of multipacks, they have at times sold multipacks for a loss although rare it has been done, they will also refund customers £10 for each complaint regardless of the size of the complaint or investigation result.
|
Yes. All true - and I was meaning long term profit in my earlier post.
If you sell crisps, it make sense to keep people who spend big money on crisps (those who buy multipacks) happy with your brand, so that they buy enough of your brand at full price to make you a profit.
And if they're sussed, then a complaint is good news. Someone's made an effort to help you keep them as a customer. And it'll only cost you a tenner! Now they can give you £50 worth of free advertising to their friends about how well you sorted out the minor problem you had with your cheese & onions being the wrong shape.
And no bank would offer a loan to someone they expected to go bankrupt. They just know that of x thousand people who walk through the door, Y of them'll go bankrupt, (and z of them'll go into enough debt for the bank to clean up on the interest charges, but not quite enough for them to stop paying
) so they pitch their rates accordingly so that on average the punters who pay up cover the losses on those that don't. They just don't know which ones that'll be.
Have you seen that new telly ad where some lender brags about how everyone pays the same rate, regardless of their particular circumstances? Chances are that either: you won't qualify unless you're a safe bet, in which case the lender could afford to have lower rates as there'll be lower risk, but probably won't, or the rates'll have to be pitched so the safe bets subisdise the losses on the dodgy bets. And will leave in droves when they discover that a competitor which does take their circumstances into account can offer a better deal. My money's on the former.
Far more common are the 'we only sell insurance to grey-haired people who drive brown Rovers' type ads - in other words, attracting the customers that are cheap to have. This seems to be what NTL are aiming for.
NTL see a small proportion of users hoovering up most of the bandwidth. They will never make money from these people. If they recommend NTL to their friends, because of how nice NTL were about not having hard caps, chances are those people will also be heavy, unprofitable, downloaders. Why on earth would NTLwant these people as its customers? If they moan about the caps at work, most people will just shrug and say, 'well, not a problem for me, I don't download 30 linux distos every week (whatever they're supposed to be)' or whatever I'm-in-absolutely-no-doubt-it's-legal-and-I-don't-think-for-one-moment-its-copyrighted material that needs 80GB a month bandwidth.
I suspect some CF members are going to become like the reckless boy racers in cheap leather jackets that Michael Winner regards disaprovingly on e-sure ads
