Smart companies realize that repeat business (customer loyalty) is one of the most important — if not THE most important — objectives to achieve in both the short and long run. This is a key challenge for marketers.
As Bain & Company explains:
“Investing to earn the loyalty of your customers often requires trade-offs — you must decide which of the many investments you could potentially make will result in the greatest return. A clear understanding of your company’s loyalty economics will help you make those decisions. It will give you a quantitative basis for investments in long-term customer assets and provide a defense against the short-term, sub-optimal, ‘quarterly earnings’ mind-set that often tempts leaders to generate ‘bad profits.'”
“It is possible to calculate loyalty economics with great precision, if you have the resources and the tools to do so. If not, you can also make rough estimates that can help guide decision-making. This page describes a relatively simple way to get reasonable, rough estimates of the potential value that can be created by improving your company’s Net Promoter score and earning the loyalty of more of your customers.”
According to Bain, a simple formula for computing customer lifetime value is:
Click the above formula to read a lot more about customer lifetime value and how to calculate it.
After enduring the Great Recession, many — but, by no means all — entrepreneurs have done better the last couple of years. So, how are they feeling as we enter further into 2015?
As Leigh Buchanan reports for Inc., the leading publication devoted to entrepreneurs, as well small and fast-growing firms:
“Entrepreneurs, optimistic by nature, are particularly — indeed, almost giddily — enthusiastic. Our second annual State of Small Business survey finds their collective confidence up sharply from last year. While they do have concerns — about health care costs, political gridlock, and regulation — most seem to share the sentiments of J. Schwan, CEO of Solstice Mobile in Chicago, who says, ‘It would take something pretty significant to inhibit the growth we’ve been experiencing.'”
“The percentage of respondents who describe themselves as ‘very confident’ about the economy’s prospects over the next 12 months has almost tripled, from just under 10 percent last year to 26 percent this year. The number who say they have little confidence that the economy will be strong has dropped by more than half.”
“Survey respondents, drawn from the Inc. 5000 universe of America’s fastest-growing companies, were even more upbeat about the prospects for their own companies, with 57 percent rating them as ‘excellent,’ versus 38 percent [last year]. The percentage who see their company’s 12-month outlook as average or poor fell from 16 percent to just 8 percent.”
Click the image to read more.
Each year, the BrandZ™ Top 100 Most Valuable Global Brands report is produced by Millward Brown on behalf of WPP.
The 2014 report “shows that the combined brand value of the world’s most important brands has risen by 12percent to $2.9 trillion. This follows a 7 percent improvement the previous year.” According to the report:
“Not surprisingly, technology brands dominate the top positions and there is a new number one. Google has knocked Apple off its perch after three years at the top. Apple is performing well but is it still redefining technology for consumers? What is obvious is that the value of technology brands reiterates how they are now an integral part of our lives.”
“Apparel is the fastest growing category with the Top 10 apparel brands growing by 29 percent, but all brands must continue to innovate and excite consumers to drive their businesses forward, something Google excels at. There is no room for complacency on quality or customer service as a brand’s reputation can be dented in seconds through the power of social media.”
Click the image to access the full 72-page report.