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BUSI 520 - DB 1 - This is a
discussion.
International Business (Liberty University)
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John Harrington
School of Business
BUSI520 – Strategic Marketing Management
Dr. Mary Alford
June 7, 20202
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As discussed in our text the traditional organization chart with customers placed at the
bottom has become obsolete. Successful organizations recognize that the customer is at the heart
of the profit center. As a result, the modern customer oriented organizational chart has become
an inverted pyramid of the traditional one. The modern organization chart places the customer at
the top and along the sides. This is a clear indication of the theory that “managers at every level
must be personally engaged in knowing, meeting, and serving customers” (Kotler & Keller,2016,
p. 68). This being the case, building long-term customer loyalty relationships is a key
component to increasing their competitive advantage and maintaining a successful company
with a strong customer base. Kotler & Keller further opine that “it is not enough to attract new
customers; the company must also keep them and increase their business” (Kotler &
Keller,2016, p. 80). LL Bean is an organization is a good example of practical application of this
topic. Imbedded within their company values they have philosophy regarding the importance the
company places on its customer relationships. Their philosophy is made up of six key points.
This one is at the top of the list, “A customer is the most important person ever in this company
– in person or by mail.” (CITATION HERE_WEBSITE LINK BELOW) What is important to
note is the fact that today’s consumers are educated, and well informed. Technology has
equipped them with numerous resources to verify companies’ claims and look for alternative
purchases. There are varying levels of loyalty regarding a consumer. The text provides a
definition of loyalty as is relates to the consumer. “Loyalty has been defined as “deeply held
commitment to rebuy or re-patronize a preferred product or service in the future despite
situational influences and marketing efforts having the potential to cause switching behavior.”
(Kotler & Keller, 2016, p.71) The text provided a list of the top thirty brands in customer
loyalty. It was interesting to me, but certainly not surprising that Apple ranked first. All
companies must evolve over time in order to stay
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current and competitive in the market. While it is important to retain customers, it is as
important to attract new ones. This will contribute to the organization’s expansion of profits. The
question then becomes how you keep your current customers and attract new ones. The term
customer churn or defection is addressed in our text. The text uses a clever analogy in the text to
describe this, as adding water to a leaking bucket. (Kotler & Keller, 2016, p.80) In order to
reduce customer defection, the organization will use retention dynamics. The theory behind
retention dynamics is to identify the percentage of the target market at each stage in the decision
process. This process illustrates the importance of attracting new customers while refining the
existing base. Customers provide the company with customer relationship capital. When
consider the many acquisitions and mergers that take place in the market today it is important to
note that attractive companies are valued for their plant, equipment, brand name, reputation and
customer base. It is also important to note that there is data to support the statistics that it can
cost more to attract new customers than to retain existing ones and profits tend to increase over
the life over the life of the retained customer as a result of increased purchases and prices. The
text discusses the importance of and the ways to build customer loyalty. Forming strong, tight
connections to customers involves interacting closely with customers, developing loyalty
programs, and creating institutional ties (Kotler & Keller, 2016, p.84). Research supports that an
attention to customer retention will increase financial and social benefits. The text identifies that
interacting closely with customers, developing loyalty programs and brand communities are
three activities that can be used to improve loyalty and retention. I am using LL Bean for my
marketing project and brand community reminds me of the new campaign called “Be and
Outsider” has begun.
They are building a community that shares a love and appreciation of the outdoors. That can be
an extreme skier or a family camping trip. The products that LL Bean sells simply enable the
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customer to get out and enjoy the outdoors. The community has value added to their life from the
physical and spiritual rewards that outdoor activities bring. This organization understands that
while business is primarily about profits and revenue streams, it is a mistake to disregard the
competitive advantages one can gain through long term customer loyalty and relationships.
My question regarding this topic is once again in relations to LL Bean. The organization
recently announced that it was changing its famous return policy. It had a long-standing
tradition of a lifetime guarantee for all its products. For example, if you owned a pair of LL
Bean boots for 20 years and needed them resoled, you could return them, and the company
would resole them or give you new boots free of charge. The policy has been changed to a one-
year guarantee and can only be returned if it is defective. Many customers were very upset at
this announcement. Do you think that this change takes away from what the company stands for
which is guaranteed quality and service? Will they lose customers as a result of this change, and
what could they do to retain their longtime customers?
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References
Smith, J. (2019, February 15). L.L.Bean: America's Maine Outdoor Clothing Manufacturer.
Retrieved June 03, 2020, from https://www.heddels.com/2019/02/l-l-bean-americas-
main- outdoor-clothing-manufacturer/
Gallagher, B. (2019, February 12). Be An Outsider A Look at L.L. Bean. Retrieved June 03,
2020, from https://www.grailed.com/drycleanonly/ll-bean-history
