Customers are willing to pay a 30% premium when they buy from companies they trust. With the continuously increasing new customer acquisition cost, keeping loyal customers has significant financial value to the company. Customers are loyal when they trust the company, and not only loyal—they recommend the company to other customers. There are five variables that have a significant impact on the trust that customers have in the company, and on its profitability. It starts with the company costs, and continues through the perceived price the customers believe they will pay and the value they believe they will get, and ends with the actual price the customers realize they had to pay, and the value they actually got. In this episode, I will analyze the relationships between those variables that make customers trust the company, and make the company profitable.
In this episode, I’m revisiting the topic of episode 11 in the 5th season. I brought this topic in the entrepreneurship class I teach at SMU, and gave my students the opportunity to reflect on it. Their comments helped me improve my own thoughts about the topic.
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