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Revenue Versus Customer

SatisfactionYash Teckchandani

D18

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General Objectives of a Business

Profitability Productivity

Employee Retention Financing

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Where do Revenue and Customer

Service fit in?

Revenue

• In business, revenue or turnover is

income that a company receives

from its normal business

activities, usually from the sale of

goods and services. [1]

• Therefore, component of

profitability.

Customer Service

• Customer service is the service

provided to customers before,

during and after purchasing and

using goods and services. [2]

• For first time customers to

become regular customers,

customer service is important.

Therefore, it is a component of

profitability.

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The Revenue Only Approach

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Example

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Communicating with the Seller

• eBay expanded into China in 2002 without considering demands of local people.

• Customers wanted to be able to see a seller’s online status and communicate with them easily, which was not provided in eBay's China website.

• Chinese customers prefer to develop trust through their own interactions with sellers rather than acting on other users’ ratings. [3]

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Result

eBay was no match for local Chinese company TaoBao. [3]

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Focussing on Customer Service

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Example 1

Amazon.com has been consistently ranked at #1 since 2010 in National Retail

Federation Customers’ Choice Awards in the USA. [4]

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Amazon’s customer service practises

[5]

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Amazon’s profits

2011 10,789,000,000 $

2012 15,122,000,000 $

2013 20,271,000,000 $

[6]

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Example 2

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Customizing Websites

• Till 2008, Marriott’s local

language websites did not offer

the same functionality as their

English website.

• Marriott recognized that being

able to attract new customers and

interact with them in their local

language via the website would be

critical to drive international

growth.

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Results

• In 2008, Marriott launched fully functional Spanish, German, French and Chinese websites.

• In the very first year, revenue for these sites experienced double-digit growth for the Spanish, German, and French languages.

• Revenues for the Chinese language website increased by triple digits. [7]

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Conclusion

Focussing on customer service automatically increases profits.

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THANK YOU

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References

1.Definition of revenue from Wikipedia.

https://en.wikipedia.org/wiki/Revenue

2. Article titled “Using customer service to position a business” http://businesscasestudies.co.uk/first-direct/using-customer-service-to-position-a-business/what-is-customer-service.html#axzz39fWqHtas

3. Article titled “10 Successful American Businesses That Have Failed Overseas”

http://www.internationalbusinessguide.org/10-successful-american-businesses-that-have-failed-overseas/

4. www.nrf.com

5. Article titled “Lessons in Customer Service From the World's Most Beloved Companies”

http://www.entrepreneur.com/article/234116

6. Amazon.com results on Yahoo Finance.

http://finance.yahoo.com/q/is?s=amzn+Income+Statement&annual

7. Article titled “Marriott International: Web Content Optimization”

http://www.accenture.com/us-en/Pages/success-marriott-international-web-services-platform.aspx