Case_In_Point_7th_Edition_Page001_183_2

p tew lour T am m toAer ore- mrT t ol o me tb orew :per m or barketing and customer service was
wasted on efforts to acquire new customers who cost us more than we made. In some cases,
we were marketing toward our established customers when that money could have been
better spent.
– So what are you telling me?
We should focus the company on bringing in new and profitable customers. That may mean
changing the way we currently and traditionally market. It means developing better
relationships with our profitable customers. And finally, it means abandoning those customers
that cause us to lose money.
– I think that theory applies to a mutual fund company better than an opera company, but I’ll give you
points for trying.
Type of Case: Growth strategies
Comments: Her answer was all over the place. Parts of it were very strong; other parts
weren’t. She went off on a tangent and got herself into trouble. The other thing is that she
never really came up with anything extraordinary. Everything she mentioned had been tried
before. The last bit about growing through existing customers and weeding out the dogs was
interesting if not totally relevant.
Note: Many firms have a version of this question. They could ask about a music school, a
museum or a symphony.