Conceptual Overview: Explore components that determine the value of a loyal customer. Maintaining customer loyalty, especially repurchases are frequent, can obviously increase profitabilityThe value of a loyal customer $($VLC$)$ is the product of the revenue per $($the contribution margin to and overhead expressed as a fraction CM$)$repurchase frequency $($RFprobability of purchase per year$)$divided by the defection rate $($DR$)$The inverse of defection rate $(1/$ D $*$ R$)$ also known as the Buyer's Life CycleThat is VLC$=$P$^*$ CM$^*$ RF$/$DR$=$P$^*$ CM$^*$ RF$^*$ BLC$.$ The graph below shows the VLC as a function of the defection rateDrag on the graph to change the defection rate DR and observe how the changes For example, see how much VLC would change if the defection rate dropped from Use the sliders to change either CM or RF and observe how the VLC curve changes