Unless you have specific data for a specific company, you can't really do that unpacking across the marketing mix. But what we do know is that it is a very strong effect. If you have a purchase today, let's say $200 with a 50% gross margin. You just made $100 from that customer. And if your loyalty rate is 80%, excluding the time value of money, you can pretty much multiply your short term number by five and that's just the value of the relationship because you're getting $100 now and then an expected $400 spread over the future. But if your loyalty rates were to go from 80% to 90%, your $100 customer is now worth $1,000. Even though there's only a 10% increase in loyalty, it doubles the value of the company.
Unless you have specific data
Unless you have specific data for a specific company, you can't really do that unpacking across the marketing mix. But what we do know is that it is a very strong effect. If you have a purchase today, let's say $200 with a 50% gross margin. You just made $100 from that customer. And if your loyalty rate is 80%, excluding the time value of money, you can pretty much multiply your short term number by five and that's just the value of the relationship because you're getting $100 now and then an expected $400 spread over the future. But if your loyalty rates were to go from 80% to 90%, your $100 customer is now worth $1,000. Even though there's only a 10% increase in loyalty, it doubles the value of the company.
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