Innovation Essay

1017 Words5 Pages
A Preliminary Research on Product Design Strategies for Managing Customer Loyalty. 1. Introduction In a highly competitive business environment, customers have become one of the most important strategic resources. Customers of a company are from three sources: existing customers, completely new customers, and new customers transferred from competing companies. Despite of the completely new ones, customers can be divided into two groups: those with high loyalty and those with low. Donna and Theodore [1] indicate that the expense for getting new customers is about six to ten times the cost for keeping existing ones. Reichheld and Sasser's point out that if a company can reduce 5% lose of existing customers then a 25-85% gain in profit is possible. In modern business environment, maintaining, enhancing, and developing customer loyalty is critical to corporate prosperity. The term "prodices" - something that apparently looks like a product but actually functions as a service - proposed by Lester Wunderman [3] in 1996 describes it all. The boundaries between products and services are getting more and more indistinctive. "A product must become some kind of service," said Newell [3, p.341] in 2000, "in order to foster long-term relationship with its customers." For better competitive advantages, loyalty element should be embedded into product design process, especially for those with produces attributes. Everyone along the new product development process contributes his or her share to customer loyalty effort. Being an essential member of a new product development team, product designers should take customer loyalty factors into account as an important design element, function and goal as well. However, concerned knowledge has never been part of their professional education. Product designers are trained to deal mainly with customer satisfaction. High customer

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