What's a Customer Worth in a Lifetime?
Grow Your Business, Not Your Inbox
What's a customer worth in a lifetime? I bet you've asked yourself that question more than once--I know I have. In the past several months, we've talked quite a bit about delivering value to your marketplace. Now it's time to figure out how much value each prospect and customer in your marketplace can bring to you.
Let's say a sharp automobile salesperson looks at each customer who purchases one of his upscale autos as someone who not only can buy one car, but also has the potential of buying a lifetime of cars and the service that goes along with them. Let's do the math on the following assumption:
People purchasing upscale automobiles start doing so at age 40 and purchase a new car every three years until somewhere around age 60.
Service = $1,000/year = $ 20,000
Total Customer Worth = $290,000 (without any adjustment for inflation)
If every car salesperson in America looked at every prospect that walked into their showroom as a $290,000 sale, I bet their actions would put the "car salesman" stereotype in an entirely different league! Every prospect and customer you serve must have a total lifetime value attached to them. This way, you'll be able to adjust your efforts, resources, time and energy accordingly. The underlying theme is that not all customers will bring the same value to you and your organization, and the opposite is also true.
Now, consider the following tips--you'll be pleasantly surprised to learn that you'll receive greater lifetime revenue from all parties concerned!
1. Keep score. You should know at a glance how much each customer has spent with you and what their top-end potential is. Customer history files are essential when it comes to making special allowances. Let's face it: Your loyal VIP customers deserve more than a casual buyer does.
If you use a computer, get a customer relationship management (CRM) program. When you punch in your customer's name, one of the first numbers that should pop up is what this customer has spent with you, along with the value you've delivered to them. Whenever you talk with them, thank them for the level of business they've given you and remind them of the value you've delivered to them.
2. Constantly look at your competition. What are they up to with regards to taking care of their existing customers? Do they offer co-op advertising dollars? Special training? Special-interest user groups?
Think twice before you spend your money or your customer's time on "sporting" event tickets and the like. Instead, you may want to purchase seats at an upcoming business improvement seminar that you know would benefit their business in a very special way.
3. Send out a newsletter. Keep in touch with each and every one of your customers on a regular basis via a newsletter. And don't write it yourself--there are plenty of automated ways to create such a correspondence and/or organizations that will do it for you. This newsletter will be the most reasonably priced way to promote your company to your customers, and it makes a great correspondence to send to your prospects. Which reminds me--pepper customer success stories throughout this document. Also, provide a feedback form or column in this newsletter for your customers to tell you what they think--you can always use fresh ideas.
4. Always be polite. Everyone appreciates courtesy. Thank your customers on a regular basis. Develop customer appreciation day/week/month. Send out birthday and anniversary cards to your customers. What would happen this year if you were to send each and every one of your customers a card on their birthday?
5. Set a good example. When you're out at your customer's site, be on your best behavior. Why? You never know who's watching. If you happen to see a piece of paper on the front lawn as you're walking into the lobby of your prospect or best customer, grab it. If someone is walking in behind you, hold the door open for them regardless of gender. Everyone appreciates politeness--besides, it's contagious.
6. Put the customer first. The best way to do this is to put the people in your organization whose job it is to take care of the customer first. Attitudes (good or bad) spread quickly. Make sure that anyone who communicates with your customers is well-paid and motivated. Give awards, and give them frequently. Nothing motivates a team more than peer recognition and gratitude. Whenever you receive an award, take it to a trophy shop and have the names of the people in your organization who helped you win it (let's face it: Solo acts are extremely rare!) engraved on the trophy.
Put the ideas you read about into action, and measure the amount of additional business you receive from your existing customers. Next month, we'll examine precise ways for you to meet the top brass in each and every one of these golden accounts.
Anthony Parinello is the author of the bestselling book Selling to VITO, the Very Important Top Officer. For additional information on his speeches, Sales Success Kits and newest book, VITO Secrets: Think and Sell Like a CEO (due out this fall from Entrepreneur Press), call (800) 777-VITO or visit www.sellingtovito.com.