Jenny is a student who runs a high-end shoe business on the side. A friend of hers produces high-quality, made-to-order shoes, which Jenny then sells to wealthy shoppers in NYC for $1,000 each. The cost to make each pair of shoes is $300.
Jenny typically sells 10 pairs per month which she always has in stock.
Consumers in New York are spending a lot. Jenny must decide to whom to sell. There are 100 clients, and she only has 50 pairs of shoes. That includes:
- 48 new clients who want the shoes. This is her only chance to get these clients.
- 48 old clients who have been with her since the beginning. They will be offended if they don’t get it. One of them is a buyer she sees when she goes to watch her niece’s soccer games. She is always there.
- 1 new client and 1 old client who are quite nice. They will understand if they don’t get it.
Whom should Jenny prioritize?
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If I was Jenny I would first prioritize old clients, especially the Pareto of them. Then I would map out the most prominent new clients and offer the available spots to them. This way Jenny can ensure loyalty and gain a new set of clients to diversify her business. To the ones who did not get the chance to buy the product I would offer them the chance to buy in advance and with a discount the new drop of shoes, that way they don’t get fully discourage.
I think Jenny should make new customers a high priority because this is her only chance to reach new customers. Providing regular customers “VIP’s” treatment is a good way to maintain customer loyalty, but other things might also happen in the future, which may lead to the loss of regular customers. Without customer amount increase, there will be churn. Therefore, to a business, always needs consider about expanding more new customers and maintain the high quality of products, so as to turn more new customers into old customers and make old customers more trust. This can make her business better and better.
I think Jenny should prioritize new customers first, there are three reasons. Firstly, it is not always easy for a business to encounter new customers, which means that Jenny should seize this chance. It is always important for a business to expand. Secondly, new customers are more potentially to purchase shoes because old customers already purchased one, which means that their command is reduced. Thirdly, Jenny is selling shoes on flights to New York. There is a great possibility for her to encounter newly comers that are in need of shoes anxiously. Eventually, these new customers will become old customers, when Jenny will have more profit because her business becomes large. At this point of time, she would have the ability and capacity to consider both old and new customers.
If I were Jenny, I would prioritize the new customers. Because I think it is more difficult to attain new consumers than to maintain the old ones. Expanding consumers is a very important part of business. And if the new customers are satisfied with their shopping experience, they may recommend to friends and family which will bring even more opportunities. For Jenny’s old customers, they already know that her shoes are beautiful and have nice quality. Even if they do not have the chance to purchase this time, they are still likely to return for the next drop. What Jenny can do for her old customers is to offer a discount for the next shopping to make up to them. Therefore I think that Jenny should grasp the opportunity and prioritize new customers.
I think Jenny can give 25 of the 50 shoes to regular customers, and regular customers will get them first come first served. The other 25 would go to new customers, so that we can also get feedback from new customers and we can improve the design and pricing of subsequent shoes, while gaining new sources of customers.
I think Jenny should prioritize old customers first, here are my reasons. First, it’s important to build customer relationships. Prioritizing old consumers is a good way to build brand loyalty and is also good for Jenny’s business in the long run. Second, old customers can generate new customers. If they are satisfied with this purchase, those consumers will recommend the product to their friends. Mouth-to-mouth recommendation really works. A loyal old consumer can generate lots of new users. Also, avoid to losing potential new customers, I would offer them the chance to buy in advance next time and give them a discount.
My prioritization for Jenny’s shoes business:
– 48 new customers
– 2 nice customers (old&new)
First, it is the only chance Jenny could ever get these 48 new customers, she could use this opportunity to win these 48 people and try to get them to become repeat consumers. She could expand the business in this way and raise awareness among a larger group of audience.
In terms of those 48 old customers who get offended, Jenny would have to keep building customer relationships. These 48 people have already known the quality and services of Jenny, and if only half of them or less would still be willing to be her customers next time, she wins more market! That doesn’t mean that she needs to always prioritize the old ones, but she will have to make some guarantees.
I also prioritized Disney’s new guests in my assignments. Disney is a global company with an incredibly high rate of repeat guests, as well as a world-leading quality of guest experience, service, and relationship. Therefore, it is okay to prioritize the new consumers and that might give you positive financial results. At the same time, we need to always focus on building guest relationships in many ways so that we could reach the goal of “making everyone happy”.
I think old customers should be prioritized. I’m not a risk-taker, so trying to save old customers will be able to guarantee the current income. According to Kevin Kelly’s 1000 Fans theory, loyal customers will be able to bring exponential growth of new customers and even turn them into loyal customers as well. The support of old customers builds the basics for the company to develop possibilities for new customers. Therefore, especially for small business, prioritizing old customers would be a safer choice without the risk to go bankrupt or other financial risks.