How Much is a Customer Worth?

What is the Lifetime Value of a Customer?

If you don’t know how much something is worth, how can you possibly gauge what you are willing to spend to acquire it?

Sounds like a reasonable question doesn’t it? Yet most key managers don’t know the lifetime value of a customer.

The Lifetime Value of a Customer is an important benchmark every sales and marketing executive should know. Why? Two reasons . . .

• First–Accountability . . . knowing what a customer brings to your company–over the lifetime of the relationship, not just the initial sale or transaction–will help you establish a reasonable budget for attracting new business, and then help you evaluate the profitability of your new business effort.

• Second–Asset Recognition . . . Customers are corporate assets. Keeping them happy is everyone’s responsibility. If you can show your staff how valuable your customers are over the lifetime of their relationship with you, they’ll have new appreciation for the importance of great customer service.

So how do you calculate this important metric? And then how do you use it to maximize accountability for your marketing programs? More good questions. We have several models for calculating LTV which are applicable to most businesses. Give us a call at (509) 922-0535 or drop us an e-mail to set up your free, no obligation consultation. We’ll help you determine your Customer LTV and help you leverage that information for increased marketing effectiveness.

Click here to download a free article on the importance of knowing and using Customer Lifetime Value metrics in your marketing planning and evaluation.

The Mecham Company has been helping successful companies increase their market share, sales revenues and profits since 1988. Let us help you put a program together that will bring the marketing and sales results you need. Give us a call at (509) 922-0535 or send us an e-mail. We’re here to help.

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