From the course: Small Business Secrets

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Building a customer loyalty strategy

Building a customer loyalty strategy

From the course: Small Business Secrets

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Building a customer loyalty strategy

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- Now let's talk about some of the specific ways in which you can build customer loyalty. Now, everything I'm going to share with you revolves around the concept of Customer Acquisition Budget or CAB for short. The CAB is calculated by one year net value of a customer divided by three. So, in other words, if a customer spends money in my business and it results in roughly three hundred dollars in a year then my customer acquisition budget is one hundred dollars. I can spend one hundred dollars to get one new customer. That's a great exchange rate. If I spend one dollar and get three dollars back, that's a good way to do business. Now, this customer acquisition budget can apply to advertising but it's especially applicable and measurable for loyalty programs. Why? Because you know your customers. You are having first hand contact with them and you can see the results immediately. So, let's talk about how we might go about spending that customer acquisition budget. First of all, is to…

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