Certified Supply Chain Professional (CSCP) Practice Exam

How do lifetime customers enhance profit?

1. By increasing one-time transaction amounts only

2. By lowering marketing costs and increasing revenue with satisfaction

3. Through aggressive price bargaining

4. By increasing inventory turnover rapidly

The correct answer is: By lowering marketing costs and increasing revenue with satisfaction

Lifetime customers enhance profit primarily by fostering loyalty and satisfaction, which in turn leads to repeat purchases over time. When customers are satisfied and loyal to a brand, they are more likely to return for future purchases, reducing the need for constant marketing efforts to attract new customers. This loyalty not only decreases marketing costs but also increases revenue because these customers tend to spend more over their lifetime compared to one-time buyers. Their positive experiences can generate word-of-mouth referrals, further amplifying revenue without proportional increases in marketing expenditure. The emphasis on customer satisfaction is critical as it builds a strong relationship with the brand. Happy customers are not only likely to return but also tend to purchase additional products or services, enhancing overall profitability. This cycle of satisfaction leading to repeat business creates a stable revenue stream that is beneficial for long-term business success.