What's a Customer Worth in a Lifetime? Calculating each customer's value will help you determine where to focus your energies.
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What's a customer worth in a lifetime? I bet you'veasked yourself that question more than once--I know I have. In thepast several months, we've talked quite a bit about deliveringvalue to your marketplace. Now it's time to figure out how muchvalue each prospect and customer in your marketplace can bring toyou.
Let's say a sharp automobile salesperson looks at eachcustomer who purchases one of his upscale autos as someone who notonly can buy one car, but also has the potential of buying alifetime 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 40and purchase a new car every three years until somewhere around age60.
Service = $1,000/year = $ 20,000
Total Customer Worth = $290,000 (without any adjustment forinflation)
If every car salesperson in America looked at every prospectthat walked into their showroom as a $290,000 sale, I bet theiractions would put the "car salesman" stereotype in anentirely different league! Every prospect and customer you servemust have a total lifetime value attached to them. This way,you'll be able to adjust your efforts, resources, time andenergy accordingly. The underlying theme is that not all customerswill bring the same value to you and your organization, and theopposite is also true.
Now, consider the following tips--you'll be pleasantlysurprised to learn that you'll receive greater lifetime revenuefrom all parties concerned!
1. Keep score. You should know at a glance how much eachcustomer has spent with you and what their top-end potential is.Customer history files are essential when it comes to makingspecial allowances. Let's face it: Your loyal VIP customersdeserve 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 ofthe first numbers that should pop up is what this customer hasspent with you, along with the value you've delivered to them.Whenever you talk with them, thank them for the level of businessthey've given you and remind them of the value you'vedelivered to them.
2. Constantly look at your competition. What are they upto with regards to taking care of their existing customers? Do theyoffer co-op advertising dollars? Special training? Special-interestuser groups?
Think twice before you spend your money or your customer'stime on "sporting" event tickets and the like. Instead,you may want to purchase seats at an upcoming business improvementseminar that you know would benefit their business in a veryspecial way.
3. Send out a newsletter. Keep in touch with each andevery one of your customers on a regular basis via a newsletter.And don't write it yourself--there are plenty of automated waysto create such a correspondence and/or organizations that will doit for you. This newsletter will be the most reasonably priced wayto promote your company to your customers, and it makes a greatcorrespondence to send to your prospects. Which reminds me--peppercustomer success stories throughout this document. Also, provide afeedback form or column in this newsletter for your customers totell you what they think--you can always use fresh ideas.
4. Always be polite. Everyone appreciates courtesy. Thankyour customers on a regular basis. Develop customer appreciationday/week/month. Send out birthday and anniversary cards to yourcustomers. What would happen this year if you were to send each andevery one of your customers a card on their birthday?
5. Set a good example. When you're out at yourcustomer's site, be on your best behavior. Why? You never knowwho's watching. If you happen to see a piece of paper on thefront lawn as you're walking into the lobby of your prospect orbest customer, grab it. If someone is walking in behind you, holdthe door open for them regardless of gender. Everyone appreciatespoliteness--besides, it's contagious.
6. Put the customer first. The best way to do this is toput the people in your organization whose job it is to take care ofthe customer first. Attitudes (good or bad) spread quickly. Makesure that anyone who communicates with your customers is well-paidand motivated. Give awards, and give them frequently. Nothingmotivates a team more than peer recognition and gratitude. Wheneveryou receive an award, take it to a trophy shop and have the namesof the people in your organization who helped you win it (let'sface it: Solo acts are extremely rare!) engraved on the trophy.
Put the ideas you read about into action, and measure the amountof additional business you receive from your existing customers.Next month, we'll examine precise ways for you to meet the topbrass in each and every one of these golden accounts.
Anthony Parinello is the author of the bestselling book Selling to VITO, the Very Important TopOfficer. For additional information on his speeches, SalesSuccess Kits and newest book, VITO Secrets: Think and Sell Likea CEO (due out this fall from Entrepreneur Press), call (800)777-VITO or visit www.sellingtovito.com.
