Question

A broad differentiation strategy improves profitability when

Answer 1

Technology and the Internet clearly have changed the way that companies connect with their customers. Face-to-face interaction is less frequent, and many more services and product transactions are occurring behind a computer screen. With a few clicks on their keyboards, clients can access a world of information that influences their purchase decisions, making the client relationship more important than ever. While the Internet has reduced face time with clients, it has provided more and different avenues to develop relationships with current and prospective clients. Some product companies never had direct relationships with their customers before the proliferation of the Internet and social media. The stores that carried their products exclusively built and maintained the client relationships. Now, manufacturers are reaching their customers more directly, branding and building relationships through interactive and educational features on their websites, blog articles and posts on their Facebook pages.

Retaining Customers
When your business is moving product, it may be tempting to put all resources into marketing tactics that bring immediate results. However, when you consider that acquiring new customers can cost as much as five times more than retaining current customers, according to Emmett C. Murphy and Mark A. Murphy in their book “Leading on the Edge of Chaos,” the financial payoff to investing in long-term client relationships becomes clear.