Some companies prefer to focus their retention efforts on their recently acquired customers. They often have greater future lifetime value potential than longer tenure customers. There is some evidence that retention rates rise over time, so if defections can be prevented in the early stages of a relationship, there will be a pay-off in future revenue streams. A further justification for focusing on recently acquired customers comes from research into service failures. When customers experience service failure, they may be more forgiving if they have a history of good service with the service provider. In other words, customers who have been recently acquired and let down are more likely to defect or reduce their spending than customers who have a satisfactory history with the supplier.
In a highly competitive environment, Swarovski uses CRM activities as a competitive advantage because it differentiates from other brands and it cannot be easily copied by the competitors. Swarovski’s path to offer two loyalty programs provides a positive consumer experience for two different communities. Both programs significantly contribute to Swarovski’s business performance, and both programs generate an essential firsthand consumer insight, which is definitely a highly appreciated and growing asset to constantly further develop the business strategy.