Question

Captive customers differ from unprofitable customers in that captive customers ________.

a)are simply "big spenders"
b)produce a referral value that is over three times their customer lifetime value
c)are a drain on a business's profits because the cost of acquiring them can never be recovered
d)have a low desire to repurchase but are unable to move easily to another company's product
e)are the result of mismanaged customer selection

Answer 1

Captive customers differ from unprofitable customers in that captive customers are those with limited alternatives, often staying with a company due to constraints rather than a genuine desire to repurchase.

Step-by-step explanation:

Captive customers differ from unprofitable customers in that captive customers d) have a low desire to repurchase but are unable to move easily to another company's product.Captive customers differ from unprofitable customers in that captive customers are those with limited alternatives, often staying with a company due to constraints rather than a genuine desire to repurchase.

Captive customers are typically bound to a company by certain constraints such as long-term contracts, limited alternatives, or high switching costs. Unlike unprofitable customers, who may not generate sufficient revenue to cover the costs associated with acquiring and servicing them, captive customers may actually be profitable over time despite a lower desire to repurchase, simply because they continue to use the company's products or services out of necessity.