Let's say that, somehow, you find a magical formula that allows you to increase loyalty for just one year, by 10%.
What impact does that effort have?
Well, you get $1.9 million in demand in the year where the improvement happens.
But you also cause more customers to purchase, and those customers act like "compound interest".
In year two, demand is $0.8 million greater.
In year three, demand is $0.6 million greater.
In year four, demand is $0.3 million greater.
In year five, demand is $0.2 million greater.
So you get $1.9 million from a one year, 10% increase in loyalty ... and you get $1.9 million in years two through five ... compound interest!
Now, if you have some magic formula for improving customer loyalty, well, you'd already be implementing the strategy, right? I mean, you wouldn't hold that in your pocket so that you could use it three years from now!!
But if you stumble across something, rest assured that you get the short-term benefit of the strategy, and you get a "compound interest" effect as well.
Helping CEOs Understand How Customers Interact With Advertising, Products, Brands, and Channels
Subscribe to:
Post Comments (Atom)
Email Marketing and AOV
If you don't think you play a role in how a customer purchases, think again. Here's a common outcome. All Other Channels Items per O...
-
It is time to find a few smart individuals in the world of e-mail analytics and data mining! And honestly, what follows is a dataset that y...
-
When introducing the concept of Marketing Budget Experiments ( click here for pricing details ), I shared thoughts on payback windows. If yo...
-
As usual, my summer schedule will dial back just a bit ... maybe three posts per week instead of five, sometimes four, sometimes more. And y...
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.