What is the value of a purchase? Clearly, ringing the cash register has some immediate benefits:
- sales revenue which (hopefully) more than covers the cost of goods and other variable costs
- inventory turnover: allowing the retailer to stock up on new/different merchandise
- capturing market-share: taking that order denies the order to competitors, providing marginally increased leverage in the industry
- Lifetime Value: Happy customers buy from you more than once, on average. Profit generated from those subsequent sales less the cost of marketing to existing customers is often the major profit center for retailers.
- Referral Value: Happy customers tell their friends about you. This "free" marketing is tremendously powerful and often overlooked.
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