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AnalyticsSales Performance Management

3 reasons to track ROI of customer loyalty

By April 17, 2018January 16th, 2023No Comments

When reporting their performance each quarter, companies usually highlight their revenue, capital investments and future projects. However, they may be missing a crucial factor in their current and future net worth: customer loyalty. When customers are loyal, they are likely to stay with companies even during economic downturns, which cushion of blow recessions and other financial crises and allow them to bounce back even stronger.

Here are three reasons to monitor return on investment connected to customer loyalty:

1. Fine -tune your marketing and sales campaigns
When you are crafting your market and sales campaigns, you’re most likely thinking about how to target your ideal audience and capture more market share. While your sales strategy sounds good in theory, it might be different in practice. While companies often track sales effectiveness metrics when it comes to obtaining new customers, there are different measures needed when calculating customer loyalty.

The right marketing and sales promotions should maintain your hard-earned brand followers while still aiming to convert leads into customers. Managers should look at their repeat customer growth as well as churn rates to determine whether they are meeting both of these goals.

2. Make better sales forecasts
As some firms struggle with creating sales forecasts, looking into the numbers behind customer loyalty could help improve the accuracy of these reports. In figuring out projected total revenue, evaluate the lifetime worth of loyal customers. Customer lifetime value is usually calculated by the profit earned per customer and could be tracked with sales performance software. Knowing the value of these customers could put into perspective the skills and other qualifications salespeople need to keep these consumers around for the long haul, such as good relationship-building skills.

3. Create more effective loyalty rewards programs
Rewards programs have surged in popularity and even small businesses have them to generate customer interest and – more importantly – loyalty. In analyzing ROI of customer loyalty, you could also use this insight to develop better loyalty rewards plans. Some customers would rather have opportunities to earn cash back or discounts as part of company’s programs. Tracking this information might also allow companie to decide how to implement these rewards features, whether to launch more rewards on mobile platforms or not.

Whether you measure ROI on certain sales effectiveness metrics or simply on customer worth, it’s important to continue to gather data to keep consumers satisfied and revenue growth steady.

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Ballast Point Ventures

Ballast Point Ventures is a later-stage venture capital fund established to provide expansion capital for rapidly growing, privately owned companies in diverse industries, with a particular emphasis on companies located in Florida, the Southeast, and Texas. The BPV partners have more than 70 years of combined experience investing in and building high-growth companies in a number of industries, including healthcare, business services, communications, technology, financial services, and consumer goods. BPV has $200 million under management and seeks to make equity investments ranging from $3 million to $10 million.

Harbert Management Corporation

Harbert Management Corporation seeks to generate superior returns for their investors by identifying and investing in the most promising early growth stage companies in the Southeastern U.S. HMC seeks to capitalize on what it believes are compelling regional dynamics, such as a strong and fast-growing economy, significant research and development activities, and an established entrepreneurial community. The HMC team combines substantial investment, advisory, and operating experience with capital and networking contacts to support great entrepreneurial teams in successfully executing their growth plans. With offices in Birmingham, Alabama; Richmond, Virginia; and Gainesville, Florida, it’s well positioned to partner with entrepreneurs throughout the Southeast.

KBH Ventures

KBH Ventures was an early investor in Iconixx Software. KBH's investment philosophy plays a significant role in the firm's successful track record. KBH believes in running businesses to be cashflow positive and profitable every month. Startups and companies in a startup mode, such as one that has been purchased in distress, are expected to generate revenue within the first six months and reach profitability within the first 12 to 18 months. KBH also only invests in or acquires companies that are in the startup phase or have less than $20 million in revenues. KBH targets technology companies that offer business-to-business services.

S3 Ventures

S3 Ventures is an early expansion and growth stage venture firm with $200 million under management. It’s focused on information technology solutions that solve large business problems. S3 also invests in medical devices that improve the human condition. S3 invests in category-defining opportunities. It partners with the team and help focus methodically on what it takes to build a successful company. S3 today helps talented entrepreneurs take their technology and market knowledge and form valuable businesses in a repeatable fashion. Investment sizes start at several million or more for Series A, B, and C financing.