Join us in this challenge. How many of the following concepts are you familiar with?
Digital Lending
According to a report published in June 2022, a study by “Mada” and “Visa” showed that 60% of Saudis prefer paying through their digital wallets. This is where digital lending plays a role, especially when a buyer opts for installment payments.
Credit Rating
It’s a score ranging between 300 and 900, indicating the creditworthiness of the borrower. Loan providers typically use this score to determine if an individual or a company will repay the debt on time.
Opportunity Cost
It refers to the potential gains and opportunities lost when choosing one option over another. For example, if you always yield to your children’s requests for extra pocket money, you miss the opportunity to spend that money on financial literacy courses that could benefit them in the future.
Herd Behavior
This concept impacts the entire economy. Even seasoned investors might abandon their decisions influenced by the majority. We see this behavior when people wear similar shoes or visit the same places, or when businesses mimic competitors. Some studies confirm this behavior.
Customer Acquisition Cost
This is the amount spent to acquire a new customer, such as advertising costs and sales representatives’ salaries. Ever noticed how keen store owners are to satisfy you, especially if you’re a regular? This is because they don’t bear this cost with you, and your positive experience might attract more customers without them spending a dime.
Lifetime Customer Value
It’s the potential amount that can be earned from a specific customer. Calculated based on their shopping frequency, the amount spent each time, the duration of their loyalty, and other factors. This explains why many brands have loyalty programs to increase your value as a customer.
Free
An enticing word that can sometimes be misleading. There’s an aspect to this concept that many might not know. Can profit-driven businesses truly offer us free goods and services? If so, wouldn’t companies offering these deals continuously go bankrupt, or at the very least, not thrive as they do today?
In conclusion, when you see the word “free”, be cautious as you might be the product, especially your time and effort. Take social media platforms as an example. Aren’t they also free? But how much time and money do you spend because of your engagement with them?
