Share this story
  •  
  •  
  •  
  •  
  •  
  •  

Customer Lifetime Value has a central strategic importance for any business as it allows entrepreneurs and leadership teams to discover more and more about their most important asset – their customers or clients.

There are a number of important reasons why a business should know the value of each individual customer or client.

The best way to understand their value is to examine that value over the whole period of a customer or clients lifetime with your business or brand.

It allows the business to analyse:

  • Where the customer came from
  • The demographic profile of that customer
  • What they have purchased from you
  • Their propensity to purchase from marketing messages
  • How much money they have spent with your business.

I will use a photographer who provide commercial photography services to their clients.

When the photographer analyses their total database of customers they will see when the customer first visited them and when they last visited them, along with a list of all photography projects carried out and the cost of each job.

Working out Customer Lifetime Value

When they add up the complete individual customer spend they can work out customer lifetime value e.g. Valley Insurance has been a customer for two years and has spent £1,200 with the company.

They can also work out the total customer spend divided by number of jobs carried out to create average customer spend per job.

In the same example Valley Insurance had two pieces of photography work carried out and spent £1,200 so an average of £600 per job.

They look to be a profitable customer.

Buying Status

As part of this analysis the company should also be looking at the ‘buying status’ of each individual customer.

Have they expired e.g. not booked any photography work in the last two years despite marketing communication; have they lapsed e.g. not visited in the last 18 months or are they active customers.

This allows the company to get a basic understanding of which existing or past customers have been the most beneficial for their business.

More often than not, using the Pareto Principle,  80% of a business’ revenues or profits typically come from a handful (20%) of their customers.

This is the first level of customer segmentation.

About The Author

Mark Pettit helps successful entrepreneurs create a vision of their ideal future and then build a plan and path to create it.  By having this clarity, his clients are able to expand their freedom and multiply their revenue and growth.

Ready to Transform Your Future?

How would you feel if you had clarity on the 3-year vision for your business and a plan and path to create it?

Imagine if you could wave a magic wand and simplify everything so you only focused your time on the things you do best and you love to do?

How would it feel is you had the focus and growth focused accountability structure to be able to achieve your biggest financial goals whilst expanding your freedom?

If you want to transform your future whilst enjoying increased happiness, confidence and profitability then book a Breakthrough Call with me today!

To get my latest articles, thinking tools, frameworks and insights on business growth, habits, goal setting and productivity Sign up to my newsletter

If you want to Free Up Your Time and Double Your Productivity in 2019 then grab my Free Productivity Mastery Daily Planner

 


Share this story
  •  
  •  
  •  
  •  
  •  
  •  

Plan your most poductive day, every day!

 

Download my Free Daily Planner.  Take control of your time, acclerate your productivity and achieve bigger results by designing your ideal day.

 

Set daily goals, increase your focus, ditch overwhelm and overcome procrastiantion.  Achieve a simple, satisfying and productive day, every day with my Free Daily Planner.  

 

Your Download will be sent shortly.

Productivity Planner by Mark Pettit of Lucemi Consulting

Get the proven formula to achieve bigger goals.

  

Download my Daily Planner to get far more done while working far less.  Measurably increase your results and productivity in just 7 days.

 

Ditch overwhelm and procrastination forever.  Increase your focus and get more time back with this simple Daily Planner.  

 

Download your Daily Planner today and start achieving explosive growth and productivity in your business and your life.

  

Your Daily Planner will be delivered shortly