The demand side of a firm is the complex chain of business processes and activities that help firms understand, manage and create customer demand. It is based on a thorough market understanding and should be managed in such a way as to effectively meet different needs of customers.

Initially, organizations divided their customers into some homogenous groups and implemented marketing initiatives based on the average profile of each group. However, many companies today have begun to move downward towards creating products that are customized to cater for needs of customers at individual level.

Companies have set up a true customer-level strategy that starts from the customer level and move upward to the firm level during the implementation process. This works out better for firms which first sets out to generate a broad marketing strategy and force fit to each of its customers and then segment each customer at the individual level. This results to low optimal level of financial performance.
According to (Sheth, Sisodia&Sharma 2000), firms that start with the customer are in a better position to adapt to various market scenarios and are able to manage their supplies. Unfortunatelythose that use one strategy with a product focus lag behind when it comes to anticipating needs and wants of customers and usually over market, under market or even mis-market to various customer segments.

They maintain a high level of overall profitability and industrial performance, companies ought to respond to or predict customer needs. They should treat their customers as assets if they have an aim of selling their products and services as per the market needs. This can be done through customer retention (Reichheld&Sasser 1990).

Besides maximizing the firm's performance and profitability with current customers,companies need to constantly update customer information in their database. This will help seek out new customers have the potential to add value back to the company. An approach applied by most firms is the acquisition and retention of customers independently. Thomas (2001) explains that firms that fail to link acquisition to retention often undervalue their customersmainly by overspending or underspending on acquisition or retention.

It is vital that firms determine what kind of prospects are worth chasing. They should also successfully identify dormant customers that are worth winning back. This helps to prevent consequences of overspending or underspending since they can be sizable. Therefore, companies ought to profile archived customer information since this usually helps to find potential customers.

This process helps to dig out customers with similar characteristics as those who add positive lifetime values to the company. This type of customers have the potential of becoming high valued assets in future.

Organizations should also recognize values created by customers. It can be achieved once it's established that a customer's value is not solely created by the services and goods that she or he purchases, but also in that customer's ability to convince other customers to buy more or prospective customers to make an initial order.

The willingness of customers to recommend a firm's products and services should also be considered beyond the repurchasing behavior. However, if the customer still does not add values, he or she is not worth serving. In this case, the firm can move such a customer to a lower cost channel and make him or her profitable. In addition, if the customer decides to leave a company, the firm should not chase the customer.