Tracking this information about your customer base is great and learn a few tips to increase the lifetime value (LTV) of your clients. This could add an increase to your profit margin.
Video Transcription
Sunshine: Do you know the lifetime value of your customer base?
Crystal: Welcome to For the Love of Business, I’m Crystal.
Sunshine: And I’m Sunshine. Let’s get to it.
All right, lifetime value. I feel like I know where you’re going with this. But maybe I better let you explain it to me. So, I don’t stick my foot my mouth again.
Crystal: Sounds great. So, think of the lifetime value as a total revenue per customer or client over the lifespan of your business. So, think of it as repeat business for as long as you are in business.
Sunshine: So, you would factor in how often they purchase from you?
Crystal: Correct. So, maybe they purchase once a month, maybe they purchase weekly.
Sunshine: Okay.
Crystal: For the lifetime of your business, what would that total revenue? If you think you want to be in business, and own your business for 30 more years, you could do that per client, estimate it, and then do the math of how much that total will be.
Sunshine: Okay. So, do you want to give us a step by step on exactly how to get this magic number of lifetime value of a customer.
Crystal: Sure, three easy ways to increase your lifetime value of a customer/client. Number one, get to know your clients. Get to know their names, greet them by their names, that will make them feel special and that you care for them.
Number two, critical non-essentials, CNEs. These are small gifts for your customer that are low cost to the business but high value to the client. Now these have nothing to do with your service or product. So, for example, we had someone doing retail online, and they would put in two little tootsie rolls in their packages, surprise. People raved about it.
Number three, get customer feedback and make innovations and changes for that.
Sunshine: What’s your number one takeaway from today’s video? Leave us a comment and thanks for watching.
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