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How to Create Customer Loyalty: Recurring is King
- Creating lasting customer relationships is important for business success.
- Recurring business generates consistent revenue, lowers acquisition costs, and increases customer lifetime value.
- Customer Acquisition Cost (CAC) refers to how much it costs to acquire a new customer; Lifetime Value (LTV) measures how much revenue a customer generates over their entire relationship with the company.
- Recurring revenue models create a steady stream of predictable income with better customer loyalty and retention.
- Netflix, which transitioned from a DVD rental service to a subscription model in 1999, reported 238 million subscribers worldwide and generated $8.19 billion in revenue in 2023.
- David Chang Music runs recurring monthly classes for cohorts of students, generating sustainable monthly revenue.
- Companies like Adobe, Microsoft and Amazon Prime have successfully transitioned to subscription models and increased their recurring revenue.
- Recurring business also helps with long-term planning and investment, as well as word-of-mouth marketing.
- Businesses should consider introducing recurring services or products to build deeper connections with their customers and a loyal customer base.
- Recurring is king when it comes to customer loyalty and business sustainability.
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