Question

If a company is closer to an end user, does it capture more value?

If a company is closer to an end user, does it capture more value?

Homework Answers

Answer #1

Yes, If a Company is close to an end user, It captures more value because-:

Attracing new costumer cost 5 times more than retaining existing costumer. Increasing costumer retention by 5% can increase profit from 25-90%. The success rate of selling to existing costumers is 60%-70-% and the success rate of selling to a new costumer is 5%-20% only. Close costumers are more profitable, they provide more feedback. Close costumers welcome company's marketing and are more forgiving. Therefore, keeping close costumers is cheaper, faster and helps the company to maintain better postion. So, by being close to an end user, It captures more value.

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