It’s well established that customer acquisition is considerably more expensive than customer retention. The reason why customer acquisition is so high is because sellers spend money to acquire customers that will not purchase from them. The key to reducing this cost is to target their efforts on those prospective customers who are most likely to purchase. Sometimes sellers can use the marketing channel to differentiate the likelihood of customer purchase. For example, if a customer comes to the seller from a word-of-mouth referral vs a television advertisement then they are more likely to make a purchase.
The situation is more complicated for markets that transition from illegal to legal (such as he sex trade). Sellers of sexual services in Canada are selling legal services but they cannot promote these services. If their’ promotion is restricted then how do they acquire customers and how do they reduce their costs by targeting appropriately. The paper we presented at the Marketing and Public Policy Conference looks at this question using a unique dataset from a provider of fetish services in Canada. A copy of the presentation is available from here: Marketing in markets that transition from illegal to legal – MPPC
We’ve only just started analyzing all the data that my class collected last fall pertaining to food waste at the retail level. One of the obvious things is that people avoid food that is close to the “best buy” date. Remember, those best buy dates are largely a scam to get people to throw out what they have and buy more. What was surprising though is that at the retail level there’s no systematic tracking of what products have which best buy dates. Unless someone physically catalogues it (and that’s unlikely when a grocery store contains over 30,000 items), there’s no way of knowing that this yogurt has a day until it’s best buy date. Using barcodes and membership cards, grocery stores can track how much of an item they have, when it was sold, how much it was sold for, and in some cases who bought it. However, information on the expiration date is not in the bar code (some would falsely claim that it is). What happens is that food which consumers are unlikely to buy are then unsold and ultimately discarded. If there was a way to track expiration dates of products on the shelf then the grocer can use discounting techniques or even heighten donations before the perceived self implosion date.
It started by noticing how many people were food insecure in my area. From that I started reading more about the reasons behind food insecurity and that led me to the problem of food waste. How is it possible that we throw out over 30% of all food that is produced even though we have millions that are food insecure. It’s a major social and environmental problem, maybe we can bring together students from different backgrounds and go in-depth on this? Maybe a local retailer will help us study this. The course came together on a whim and I wasn’t sure what would come out of it but any expectations I had have been far exceeded. The students have contributed so much to the study of this issue, we’ve made a positive impact in our community, and we have the potential to really push positive change. I enjoy all my courses but this one really puts the cherry on top. To read the write up in the Richmond Times Dispatch please click here.
Thanks to Shannon Hauser our new class on alleviating food waste now has a website. I envision that the students in the class can post current news on Food Waste that they read and the site can be repository of information for anybody interested in the topic (and it’s an interesting topic). Give it a look, all feedback welcome. http://zerofoodwaste.kashefmajid.com/
The pandemic is subsiding in several countries and tourism is picking up. In the United States traffic in the air and on the roads is at or exceeds pre-pandemic levels. One of the options that millions of guests will have is to book a stay at an Airbnb (except in the Outer Banks which is all booked up!). My most recent research with Tarik Dogru, Michel Laroche, Makarand Mody, and Courtney Seuss studied how guests assess those extra fees they have to pay. When an Airbnb has an extra fee for professional cleaning or a security deposit, it actually signals to guests that the host values cleaning and is willing to charge extra for it. We all hate extra fees but if you had to assess two different Airbnb’s with everything is being equal (including price) which AIrbnb do you think is cleaner? The one that has an extra-cleaning fee or the one that doesn’t, which would you choose? Our findings revealed that consumers prefer the one that has the extra cleaning fee. In short, we hate the fee but it signals quality. Communication quality while evoking loss – final proof – Tourism Management
It’s well established that customer acquisition is considerably more expensive than customer retention. The reason why customer acquisition is so high is because sellers spend money to acquire customers that will not purchase from them. The key to reducing this cost is to target their efforts on those prospective customers who are most likely to purchase. Sometimes sellers can use the marketing channel to differentiate the likelihood of customer purchase. For example, if a customer comes to the seller from a word-of-mouth referral vs a television advertisement then they are more likely to make a purchase.
