Do you know the lifetime value of a customer? If you knew, you would take better care of your customers. Good customers are like comic books and baseball cards. Who would have thought they would become so valuable over time. The better we take care of them, the greater value they yield. It makes me wonder how much Spider-Man or my Mickey Mantle card might be worth on eBay today.
Customer Life Time Value Calculator
I was working with a client, when the question came up about the value of a customer. I created a simple equation that calculated the true value of his customer. It was surprising to learn how much each of his customers was worth to him and his business. We needed two pieces of information to determine the value. We needed to know how much the average customer does with him in a year and we needed to know how long the average customer stayed with him. Multiply these two factors and you will have your answer.
Customers are like gold, we must strive to retain all our customers and multiply their value in two ways. One way to generate more business is to increase the frequency and value of orders. Another way is to duplicate good customers through referrals, bringing in new business.
Work Hard or Work Smart With Referrals
Research tells us that it takes 5 times as much work and money to find a new customer as it does to keep one. If this is true, how smart are we if customers are lost through our poor salesmanship. How often we stay in touch with our customers is one factor that makes a difference in the success of a salesperson or a business.
The purpose of this article is to remind you of the importance of keeping in touch with customers so, they keep coming back. We must realize that our competitors are trying to take our best customers everyday. If we don’t treat them like Mickey Mantle playing cards, we won’t develop a successful business.
Start today and set a plan to contact your top customers and thank them for their business. If you don’t do it, who will? If you don’t know the value of your customers, use the calculator in this article to find out how much they are worth. Take the next step and ask for referrals to duplicate good customers and add more value to your business.
Steve Martinez implements sales management strategies with a focus on automating sales and sales management. Selling Magic teaches businesses how to automate and customize CRM solutions with the best practices of sales management for greater profits. http://www.sellingmagic.com
