Database Reference
In-Depth Information
1.2.8 Customers as Lifelong Investments
Relationship-based enterprises view customers as lifelong investments, and, therefore, their
primary objective is to maximize the sum total of the time value of current and envisaged
future customers. Relationship-based enterprises (RBEs) focus on accomplishing the intricate
and long-term goal of
owning
the customer.
Traditional offering-based organizations are focused on maximizing the ROI on customers as
early on in the relationship as possible because once the competition sets in, the margins and pay-
of would invariably go down leading to the regime of rapidly diminishing returns. Figure 1.11
shows the classic product life cycle or the
S
curve for offering-based enterprises. On the other
hand, customer-responsive organizations are more focused on maximizing the sum of the area
under the curve, that is, the sum total of time value of the current and envisaged future custom-
ers. Figure 1.12 shows the characteristic exponential curve for the relationship-based enterprise.
Time/resource
Figure 1.11
Value curve for offering-based enterprises.
Time/resource
Figure 1.12
Value curve for relationship-based enterprises.
