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keriflur
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Re: Loyalty, Loyalty, Loyalty

AFAIK loyalty has never been a business statistic.  No one counts customers, they only count sales.

AlanNJ
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Re: Loyalty, Loyalty, Loyalty


keriflur wrote:

AFAIK loyalty has never been a business statistic.  No one counts customers, they only count sales.


"Goodwill", however, is taken into consideration and B&N seems to be losing a lot of that.

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keriflur
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Re: Loyalty, Loyalty, Loyalty


AlanNJ wrote:

keriflur wrote:

AFAIK loyalty has never been a business statistic.  No one counts customers, they only count sales.


"Goodwill", however, is taken into consideration and B&N seems to be losing a lot of that.


Really?  How does a business statistically quantify how much goodwill they have?

Doug_Pardee
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Goodwill: I don't think it means what I think you think it means


AlanNJ wrote:

 

"Goodwill", however, is taken into consideration and B&N seems to be losing a lot of that.


If you're referring to the "goodwill" that appears on financial statements, that's nothing to do with customers. It's accounting for how much the company had overpaid for some acquisition; it's reduced over time. Having "goodwill" on the books is somewhat undesirable.

 

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patgolfneb
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Re: Goodwill: I don't think it means what I think you think it means


Doug_Pardee wrote:

AlanNJ wrote:

 

"Goodwill", however, is taken into consideration and B&N seems to be losing a lot of that.


If you're referring to the "goodwill" that appears on financial statements, that's nothing to do with customers. It's accounting for how much the company had overpaid for some acquisition; it's reduced over time. Having "goodwill" on the books is somewhat undesirable.

 


Isn't goodwill the also the value of a brand name  not reflected on the asset sheet?  This is why say someone buys a bankrupt RCA 

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keriflur
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Re: Goodwill: I don't think it means what I think you think it means

Goodwill is the place I go to donate my old shoes.

AlanNJ
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Re: Goodwill: I don't think it means what I think you think it means


Doug_Pardee wrote:

AlanNJ wrote:

 

"Goodwill", however, is taken into consideration and B&N seems to be losing a lot of that.


If you're referring to the "goodwill" that appears on financial statements, that's nothing to do with customers. It's accounting for how much the company had overpaid for some acquisition; it's reduced over time. Having "goodwill" on the books is somewhat undesirable.

 


From Wikipedia (for whatever that's worth):

 

For example, a software company may have net assets (consisting primarily of miscellaneous equipment, and assuming no debt) valued at $1 million, but the company's overall value (including brand, customers, and intellectual capital) is valued at $10 million. Anybody buying that company would book $10 million in total assets acquired, comprising $1 million physical assets, and $9 million in goodwill. In a private company, goodwill has no predetermined value prior to the acquisition; its magnitude depends on the two other variables by definition. A publicly traded company, by contrast, is subject to a constant process of market valuation, so goodwill will always be apparent.

 

I read the above as encompassing the "loyalty" factor that this thread started out with.  If there is little loyalty (and I've already given my opinion on that) then the company's overall value including customers (from above) is decreased.  Therefore if customer loyalty is decreasing then so is "goodwill".

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patgolfneb
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Re: Goodwill: I don't think it means what I think you think it means

I suppose you could measure it by whether they can sell t shirts and caps with your logo on them.  Works pretty well for Ferrari, they make more from licensing than they do from the  cars they sell. :smileywink:

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keriflur
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Re: Goodwill: I don't think it means what I think you think it means

[ Edited ]

AlanNJ wrote:
From Wikipedia (for whatever that's worth):

 

For example, a software company may have net assets (consisting primarily of miscellaneous equipment, and assuming no debt) valued at $1 million, but the company's overall value (including brand, customers, and intellectual capital) is valued at $10 million. Anybody buying that company would book $10 million in total assets acquired, comprising $1 million physical assets, and $9 million in goodwill. In a private company, goodwill has no predetermined value prior to the acquisition; its magnitude depends on the two other variables by definition. A publicly traded company, by contrast, is subject to a constant process of market valuation, so goodwill will always be apparent.

 

I read the above as encompassing the "loyalty" factor that this thread started out with.  If there is little loyalty (and I've already given my opinion on that) then the company's overall value including customers (from above) is decreased.  Therefore if customer loyalty is decreasing then so is "goodwill".


The way I read this, the wikipedia definition of goodwill is the difference between the valuation of a company based on stock price and the actual sum of physical assets.  This is not the same as customer loyalty, and in fact does not in any way directly relate to the total number of customers or any calculation of what each customer spends (which would be an indication of loyalty).

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keriflur
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Re: Goodwill: I don't think it means what I think you think it means


patgolfneb wrote:

I suppose you could measure it by whether they can sell t shirts and caps with your logo on them.  Works pretty well for Ferrari, they make more from licensing than they do from the  cars they sell. :smileywink:


Would you buy a B&N cap?  How about a t-shirt of the Bronte sisters?  :smileywink: