Your Business Survives Or Thrives Based on You Customers Lifetime Value. Here, We’ll Teach How To Start Thinking About This Number In Order To Grow Your Business.
To understand your customer lifetime value you need to understand three things:
- How much your customers cost to acquire
- How much your customers purchase from you
- What intangibles does each customer bring to the table on average
Customer Acquisition Costs
This is where you need to consider your marketing & sales strategies. You need to make sure you don’t group customers together that have different ways of being acquired. Some may come from your social media, while others from a billboard. Three key questions to ask yourself, and answer correctly:
- Do some of your customers come exclusively from one marketing/sales channel and others from another?
- Are some of those customers more costly to acquire than others?
- Are their any maintenance costs for customers who have already made a purchase to get them to make another?
Your customer lifetime value starts here. Make sure you do not skip this step in consideration of what a customer is truly worth. It’s easy to overlook and get excited about how much they give you. Fortunately, that’s next!
Customer Revenues
Now it is time to explore the value of a customer once you have acquired them. Here you want to consider some basic questions such as:
- What is my average purchase price?
- How many purchases does my average customer make?
- How far apart are those purchases in time?
- If I have multiple purchases, are they increasing or decreasing in value over time?
These are important to consider because they need to be compared to customer acquisition costs. This can make investments in your marketing that might seem scary seem more reasonable. This is important for growth in your business. You don’t want to pay $70 to acquire a $50 purchase, but you may want to pay $70 for a $500 average customer value. Those are very different numbers.
You may also want to consider adding more valuable services to increase your customer lifetime value so you can afford to acquire more. Now THAT is some business expansion in the works!!
Intangibles
Customers have more to offer than just money. They also can build something else just as important, your reputation. Here are some questions to start framing the value they provide here:
- When your customers make a purchase, are they leaving a positive review online?
- After they make a purchase do they come back with friends?
- Are they posting about you online in a positive/negative light?
Today reviews make or break a business. Positive testimonials are how customer trust is built in the modern economy. Having them is going to make it a lot easier to acquire customers, which in turn reduces your marketing and sales cost. If you don’t make this a part of your processes now, you certainly should. It will pay dividends.
Word of mouth of course is the oldest and most powerful marketing available. If your customers have such an amazing experience with you they can’t NOT talk about it, you’re going to see them coming back with friends. Make sure you provide the most quality experience you possibly can, and you’ll see your business grow.
How We Can Help
We at Victory Sign Company know the importance of your customers perception of your business. We’ll make sure their first impression of you is nothing but stellar.
We are a high quality, full service sign company that can suit your company’s needs. Please give us a call today for a free consultation, and we’ll make sure your building is reducing your cost of customer acquisition.
Contact us for a quote!
Victory Sign Company
1021 S. Brown Street, Suite K
Liberty, MO 64068
(816) 407-7446
www.victorysignco.com
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