Week 11 - Customer Lifetime Value (CLV) and Rosewood Hotels
About Customer Lifetime Value
Frankly speaking, I do not know whether
my company clearly knows about the value of its each customer. However, I do believe that we use the basic
concepts of customer lifetime value.
The majority of our business is on B2B. The CLV for commercial business is much
greater than consumers’ business because that the cost and risk are much bigger
when a company switch its supplier than a consumer who changes a brand. The higher is the risk of switching supplier,
the higher is the CLV when your company becomes the supplier. For example,
Boeing airplane will not easily change its supplier even for bolts and nuts
even there is a new technology for some parts. For B2B, it is very important to
maintain a good relationship. My company assigned representatives for our major
customers. In the same time, we have the ownership of our distribution system,
which helps us in acquiring new customers and retaining the current customer.
I know some people in my company
working on the US government business. It should have an even higher customer
lifetime value than B2B customers. US government is one of the most valuable
customers for my company.
Rosewood Hotels Case
The major issues in the Rosewood Case
are 1. The impact upon its profits to use individual branding or common
branding; 2. The awareness of Rosewood brand.
My recommendations for the management
of Rosewood are to use the current individual brand as a sub-brand while
increase the awareness of Rosewood brand. Another thing that Rosewood can do is
to inter-reference between its individual hotels. By doing this, it can
emphasize all these hotels are different and are under the same management.
If there is a chance, I like to visit Las
Ventanas al Paraíso, LOS CABOS,
MEXICO for getting away the cold weather in MN during our winter time.
Las Ventanas al Paraíso
