The Customer Revenge Case Study Essay example

986 Words Oct 26th, 2011 4 Pages
Harvard Business Review Case Study :
The Customers’ Revenge by Dan Ariely
(December 2007)

As an introduction of this case, a little recall of the facts may not harm anyone.
Atida is a 70 year old motor company, producing and selling stylish and innovative cars and they have just launched a new one on the market : the Andromeda XL. The brand has many loyal customers and devoted fans among various clubs and communities.
Jim MacIntire and his colleagues from the customer service department have tried to enhance their operations by implementing various methods : For instance, the company offers comprehensive warranties, a special credit card rewarding customers with presents, and a new call center was implemented a year ago in India
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Nowadays, customers control the brand, can praise it to the skies or bad-mouth it thanks to blogs, social networks and YouTube. The reputation of a company and the image of a brand are no longer managed by marketers only but they are also in the hands of customers since word-of-mouth, bad or wrong, spreads like wildfire on the Internet.

There is no miracle solution for Atida to deal with its customers and one should avoid opting for a Manichaean vision. Some managers may be willing to hierarchise customers according to their Customer Lifetime Value (ie. CLV, the present value of the future cash flows attributed to the customer relationship). Thus, customers like Tom Zacharelli, who have purchased several cars for the past years, that are devoted and loyal to the brand, would receive a better treatment and service (gifts, reimbursements, etc.) since their CLV is higher. To the contrary, nothing would be done for customers that keep complaining because there is always something wrong (Jessica Long seems to be a good example of that kind) and are quite costly for the company. Such a classification of customers according to their CLV would be a good solution if word-of-mouth didn’t exist. Its power and the long-term effects arising from it can harm the brand, and make sales dwindle drastically.

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