The Importance of Customer Lifetime Value from a Consumer Perspective

After our discussion about customer lifetime value in class, I really began to think about how important that concept is to marketers and most people at all companies in today's world.  With competition in almost every industry at an all time high, and the great cost to acquire new customers, companies are willing to go to more extreme lengths to retain their existing customers.  This mindset can however backfire on them in some instances.  This made me think about a time when my father was able to manipulate a customer service agent at JetBlue using many aspects that played off of customer lifetime value.

In this particular situation, my father was pretending to be my best friends uncle.  My father has always had a way with getting what he wanted out of companies and somehow changing their policies to fit his demands.  My friend booked a flight and last minute realized he did not want to use it.  Well apparently on JetBlue they do not offer refunds for cancelled flights.  So here is where customer lifetime value worked against JetBlue.  My father went on some long rant about how their family had been customers of the airline for a very long time and spent tons of money with them over the years.  He made up a story about a fake summer home they had in Florida and how they had always used the airline when flying there.  He then brought up other airlines such as Southwest and how their policies were different and that if this dilemma was not solved that this would not only be the last time he used JetBlue, but also the last time anyone in our family did.

Well with the previously made statements about how long we had been customers and all the money we spent with them, and threat of losing that, the agent told my father to hold for a second.  After a few minutes he came back on the line, said he spoke with his manager and that they were willing to offer my friend a credit for his flight to be used toward any JetBlue flight for the next year.  We accepted the offer and once again got around company policy.

In the end, I believe this is a great example about how important customer lifetime value is to companies.  The one issue here is that the airline agent never checked any records, because if he did he would have realized that the above story was absolutely false.  Maybe this is just a rare instance, but this story is an example that companies need to always figure out the true value of a customer on their own and not allow their dedication to customer lifetime value to get the best of them.