Businesses need to ensure that there is ongoing education of their team on the lifetime value of a new customer.
Lifetime customers represent repeat business and repeat business equals profit. If you assume that the lifetime value of a customer is about 7 – 10 years on average, multiply the average sale by the number of times you expect to see that customer each year and then multiply the projected annual sale by the number of years expectancy for “lifetime value”. This will give you an idea of what the customer is potentially worth to your business.
One of the most effective ways of marketing your business is to increase the number of visits that your long term customers make to your business as this will add to the lifetime value of your customer. To develop lifetime value of customers you could consider the implementation of a referral system where current customers are encouraged to refer new people to your business with an appropriate incentive being given to the referrer. This could be a weekly lucky prize or a discount of a product in your business.
How do you develop lifetime customers?
- improve your referral system
- create outstanding service to all customers to encourage them to become lifetime customers
- create a database for customers and offer them outstanding service
- keep improving the level of service
- offer special event and promotions to your customers
- go the extra mile
- get them to say “wow”!
