Lifetime Customer Value

Date: On Demand (access any time)
Investment: $285 per person
(Discounts for multiple participants)

INCLUDES: One-on-One Telephone Coaching

It’s great to be able to sell to 100 customers a year, they come in they buy from you, you meet your sales targets for the year and everyone is happy.

What’s better however is selling to 100 new customers every year and having your old customers from the year before calling you themselves and buying your product. That’s 200 sales this year, and you only made an effort for 100 of them. If you keep your new customers happy, you will make 300 sales the next year and even if you don’t sell to any new customers, you are still exceeding your sales targets by 100%.

That’s the value of a lifetime customer and why it pays to understand how much that is worth and way to keep your customer coming back to you again and again.

In this podcast we are going to explore 6 ways to keep our customers with us for life. These six ways are:

  1. Understand the importance of having a customer for life (and how much that’s worth) Customer lifetime value
  2. Customers don’t care how much you know until they know how much you care
  3. Keep in regular contact with them. Electronically is the easiest way this
  4. Make them feel special offering them special offers
  5. Excelling customer service. This is the critical touch point for building value
  6. Read the book. “Moments of truth” and understand the concept of ‘touch points

1. Understand the value of having a customer for life

I would like you to think about a product you use every day, which you have been using for the last 25 years or more. For men, this could be your brand of shaving cream or razors, how many of us have shaved with Gillette from the time we learnt how to shave?

Can you calculate the amount of money Gillette has earned from just one person in this room? That is the value of a lifetime customer, versus one who just picks up a can of shaving cream and never buys it again. Customer lifetime value is the total monetary  value of the period a customer is likely to do business with you. It’s the potential contribution your customers can make to your business over time. So take a look at your products and the frequency with which a customer needs to purchase that and the number of years they are likely to buy this from you. This gives you the total lifetime value of one customer.

2. Customers don’t care how much you know until they know how much you care.

Customers are people too and people like to know that you care. They don’t want to know how much you know about your product or service, they are interested in what you do with this information. If you can show your customers that you care about making them more efficient, or more attractive, or thinner or richer or even smarter then you have a customer for life. Think of yourself as someone who is your customer’ fairy godmother (Cinderella), do you remember how wonderful she was – how much she really cared? We need to be our customer’s fairy godmothers and actually care about them getting to the ball in time. In other words we need to care about their problems and finding a solution to them.

3. Keep in regular contact with them

Electronically is the easiest way this. How does your family know you care about them? You call them, go to visit, drop them an email or write them a letter, right? You can do the same with your customers, but in a more businesslike way. Keep in touch with your customers by sending them regular emails, or making a quarterly phone call just to say hi. Electronic media makes it so easy for us to send Christmas cards, Thank you notes, Birthday cards etc. A great example that I would like to share is this trainer I met once who I was interested in hiring, however I was not very impressed with his skills at the time. The gentleman though made it a point to send me a little quote every single day via SMS and finally when I did have a project on hand that I thought was right up his alley, he was the first person I called. Simply cause he kept in touch!

4. Make them feel special by offering them special offers

Don’t you love it when someone offers you a bonus gift or an extra discount just because? I know people who fly only certain airlines because they get priority check-in, free upgrades and special offers from their carrier of choice. The airline also has a lifetime customer as a reward for its efforts. Make your customers feel special, by offering them special discounts or bonuses and tell them why you are doing so. Tell them, “it is because you’ve been a customer with me for 2 years that I am giving you a price that I would never give a new customer”. Or throw in some freebies and make their day.

5. Excelling Customer Service

This is the critical touch point for building value. You cannot sell a great product with terrible customer service; these two points really do go hand in hand. If you want to build a pool of lifetime customers, you will have to have outstanding customer service. This means that your customers need to get quick and accurate resolutions, be able to reach the right department in record time and be happy with the level of service offered. At every point along their journey if your customer experiences ‘customer delight’ and not just ‘customer service’ he will be a customer for life.