2.4. Ensuring Customer Loyalty

As we discussed, loyalty (retention) has long been known to have a significant impact on profit. Depending on the industry (and perhaps the statistician), it is somewhere between 5 and 17 times more costly to acquire a new customer than to keep the loyalty of a current one. The difference in revenue between the costs of selling to a new customer versus the cost of selling to an existing customer is pure profit.

2.4.1. Why Build Loyalty?

Frederick Reichheld of Bain & Company has studied the impact of loyalty on business profit extensively. He studied numerous industries (with both consumer and business end-customers) to understand the impact of customer loyalty on customer net present value.[1]

[1] Net Present Value ...

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