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Atricle Dump - Customer Lifetime Value - The Key To Maximizing Your Profits!
No matter if you're in a very complex business and in a huge multinational corporation or if you run the simplest type of business like a lemonade stand or even a business as a hot dog vendor the key to your success often rests with your ability to please your customers.You see, the consumer or customer has a desire for your product or service and they are willing to depart a unit of trade called a dollar to partake in a transaction, which will give them what they want. If you give lousy service they no longer want your hot do
What this means is that over an average customer lifespan of two years, each new customer you could acquire and keep is worth $350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your bottomline,
Many workers and consumers distrust CEOs (in part due to recent scandals like at Enron) and believe that they are overpaid. Many look at it as a moral issue saying that you cannot justify paying millions to one person when so many people are working for minimum wage and in poverty.Sensational headlines add fuel to the fire. In Canada, there was a report published in most of the daily newspapers saying that by 10 am on January 2nd, the 100 top paid CEOs in Canada have already earned more than what the average Canadian makes in
In my many years in Sales and Marketing, I've met many CEOs and business owners who don't have much clue as to what Customer Lifetime Value is, much less its importance and the impact it has on their bottomline. To most of them, what matters most is to increase revenue by continuously acquiring new one-shot customers.
This is one of the fatal mistakes that many business owners make; it's a sad scenario, but it's also the reality. Let me tell you something: it'll cost you 5 times more to attract a new customer than it is to bring one of your past customers back to you.
I don't know you personally, but if you're a smart business owner, you'll understand that every cent you invest in advertising is going towards acquiring new customers. You'll also realise that once you've acquired the customers, you just can't afford to let them go.
So what's Customer Lifetime Value?
Customer Lifetime Value is defined as the total value, in monetary terms, of your average customers spanning the entire period that these customers are likely to do business with you. It's the potential contribution of your customers to your business over a period of time.
Here's how to calculate your Customer Lifetime Value:
1). Let's say you've 2,000 steady customers and these customers remain with you for an average of two years; for the past two years, your net profit was $700,000.
The Customer Lifetime Value can be calculated as: $700,000/2,000 = $350.
What this means is that over an average customer lifespan of two years, each new customer you could acquire and keep is worth $350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your bottomline, m
It seemed like a good decision at the time. A 10-percent raise, an easier commute and a chance to move up the corporate ladder.Now, six weeks into the new job you know in your gut and sleepless nights that maybe, just maybe, you’ve made the biggest mistake of your career. Your new company is a 180-degree change from your former one.Are you finding any of the following? Your new company hardly holds meetings while your former company had constant meetings. You’re now faced with status-quo thinking when you’re accustomed
This is one of the fatal mistakes that many business owners make; it's a sad scenario, but it's also the reality. Let me tell you something: it'll cost you 5 times more to attract a new customer than it is to bring one of your past customers back to you.
I don't know you personally, but if you're a smart business owner, you'll understand that every cent you invest in advertising is going towards acquiring new customers. You'll also realise that once you've acquired the customers, you just can't afford to let them go.
So what's Customer Lifetime Value?
Customer Lifetime Value is defined as the total value, in monetary terms, of your average customers spanning the entire period that these customers are likely to do business with you. It's the potential contribution of your customers to your business over a period of time.
Here's how to calculate your Customer Lifetime Value:
1). Let's say you've 2,000 steady customers and these customers remain with you for an average of two years; for the past two years, your net profit was $700,000.
The Customer Lifetime Value can be calculated as: $700,000/2,000 = $350.
What this means is that over an average customer lifespan of two years, each new customer you could acquire and keep is worth $350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your bottomline,
Greg has been managing a small surf shop by the beach. Business was doing quite well until some incidents of robbery occurred in the area. Since the perpetrators have not been found yet, everyone was suspicious especially when hiring an employee to help in the store.When an applicant arrives, Greg usually reviews the resume before conducting an interview. After speaking to the person, the paper is placed on the active list while that don’t are placed in the trash box.Since it is possible that this is an inside job, Greg
So what's Customer Lifetime Value?
Customer Lifetime Value is defined as the total value, in monetary terms, of your average customers spanning the entire period that these customers are likely to do business with you. It's the potential contribution of your customers to your business over a period of time.
Here's how to calculate your Customer Lifetime Value:
1). Let's say you've 2,000 steady customers and these customers remain with you for an average of two years; for the past two years, your net profit was $700,000.
The Customer Lifetime Value can be calculated as: $700,000/2,000 = $350.
What this means is that over an average customer lifespan of two years, each new customer you could acquire and keep is worth $350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your bottomline,
Corporate Investment Recovery ProgramsEvery business eventually has items they no longer need. For some businesses this may be machine tools, processing lines, and even complete plants, while for others it’s overstocked inventory, end of life products, computers or vehicles. Most everything that flows through the billion dollar purchasing channels and supply chains of the world will some day be discarded or sold. In some situations these items may be relatively new and still in original packaging or
Here's how to calculate your Customer Lifetime Value:
1). Let's say you've 2,000 steady customers and these customers remain with you for an average of two years; for the past two years, your net profit was $700,000.
The Customer Lifetime Value can be calculated as: $700,000/2,000 = $350.
What this means is that over an average customer lifespan of two years, each new customer you could acquire and keep is worth $350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your bottomline,
First impressions matter and one of the best ways to introduce yourself is by using the elevator speech technique. This technique is colorful, memorable and is guaranteed to grab the attention of your interviewer.Elevator speeches are primarily crafted for very, brief chance encounters in an elevator. This is why they are only about 30-60 seconds long. Business people use them everyday to acquire new clients. Successful job candidates use them to position themselves head and shoulders above their competition.An elevator
What this means is that over an average customer lifespan of two years, each new customer you could acquire and keep is worth $350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your bottomline, my advice is that you be prudent and conservative in your estimation.
Why is it so important to you and your business?
Lifetime Customer Value is important to you and your business for the following reasons:
1). Knowing the Lifetime Value of your customers is crucial to you and your business as it serves as a benchmark without which you'll be groping in the dark.
When you know the Lifetime Value of your customers, you can determine how much time, effort and money you can afford to invest to acquire that customer in the first instance.
In other words, you can invest more today to reap a much larger profits later down the road as long as your cashflow is healthy and can support it.
Every marketing campaign that you undertake costs you money as well as reaping you benefits such as increased sales, enhanced corporate image, etc. But how can you be sure that the benefits would outweigh the costs or investments? This is where knowing the Customer Lifetime Value is so powerful - it helps you to determine this even before you launch your marketing campaign.
2). When you realize that customers are actually an ongoing stream of revenue as opposed to a one-shot sale, you can re-focus your marketing efforts.
Instead of contantly struggling to acquire more and more new customers, you can now begin to focus on keeping your existing customers longer and selling to them repeatedly, in other words, repeat sales.
You may spend more like making stronger and more
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