The King is Naked: Discovering that Frequent Customers May Not be Your Best Friend

The King is Naked: Discovering that Frequent Customers May Not be Your Best Friend

Luiz Antonio Joia (Brazilian School of Public and Business Administration-Getulio Vargas Foundation and Rio de Janeiro State University, Brazil) and Paulo Sergio Sanz (Brazilian School of Public and Business Administration-Getulio Vargas Foundation, Brazil)
Copyright: © 2008 |Pages: 14
DOI: 10.4018/978-1-59904-822-2.ch008
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Abstract

The scope of this work is to explore the transaction profitability of frequent and sporadic buyers in the e-commerce arena. Evidence in relationship marketing literature stressing the impact of purchase frequency on customer profitability, as well as recent academic research challenging this approach and pointing out the importance of sporadic clients, is analyzed and presented. A single case study research methodology was chosen for this article, due to the exploratory facets associated with the subject and the industry under investigation. In order to gather relevant input to carry out this research, one of the largest retailing groups in Brazil was investigated. Conclusions are drawn showing that greater frequency of purchases does not necessarily translate into increased customer transaction profitability. Implications are presented, enabling practitioners and academics to grasp fully the real value of customers – both frequent and sporadic buyers – in order to develop coherent approaches for dealing with them adequately.

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