Chapter 27. The value of brand loyalty

Loyal customers are an important brand asset. Loyal customers represent a profit stream paying out over the years. This notion is referred to as “customer lifetime value” and is predicated on loyal customers representing a stream of revenue (and profit) over time. In some businesses, the value of a customer can be quantified by projecting expected revenue, costs (including acquisition and retention costs), and likelihood of retention over time. The lifetime value of customers can be increased by any combination of increasing revenue from that customer, reducing costs, and increasing retention rate.

Improving customer loyalty impacts both revenues ...

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