Hallmarks of Customer Franchise
- Frequent buying which may occur at set intervals or based on individual consumption patterns.
- Customer acquisition costs often exceed the initial revenue you get from that customer.
- Profitability depends on locking customers in for a certain time period and/or locking out competition.
- Loyalty is rewarded with an “everyday” discount that is built into subscription- or volume-based pricing
- Customers unwilling or unable to commit to volume and/or ongoing buying pay a substantial price premium.
- Alternative vendors may crop up with offerings designed to appeal exclusively to customers unwilling or unable to commit to ongoing buying.