Lifetime Value, #4 of 10
Posted Under: Entrepreneur Mindset
#4. Lifetime Value
Companies today have tens of thousands– in some cases millions– of customers. We do not know who they are. We cannot recognize them and talk to them as the old Mom-and-Pop corner grocers did. Loyalty has all but disappeared. Customers are loyal until tomorrow’s newspaper, when they see a coupon for something at another store and – whoosh, they’re gone. What is true of grocery stores is also true of department stores, drug stores, hardware stores, office supply stores, banks, movie theatres – virtually every retail sales organization today.
What has begun to rapidly change this picture has been the advent of computers. In the past 15 years, computers have become so sophisticated and powerful, and their prices have become so inexpensive, that it is possible to keep in a computer today the kind of informative data that the old corner grocer kept in his head, and to use that information to recognize and do favors for our customers. By setting up a customer database, and using it to start a dialog with customers or clients, some companies have been able to reestablish contact with their customers, contact designed to build loyalty, referrals and repeat sales. Retention building is possible.
So, a one-to-two week focus on THIS area of The Big Ten can yield MASSIVE RESULTS in your services, sales and profits. Watch your Inbox for further explanatory emails about this and all other Big Ten dynamics, because these are THE dynamics which make a business super-successful, head-and-shoulders ABOVE all competition!
Your gold customers should not be bombarded with marketing programs, rather they should be rewarded with super-services. These are 80% (or some other large percentage) of our revenue. We must retain these loyal folks. We spend our marketing budget on the Silver and other two fifths encouraging them to move up, to get into Gold Heaven. On the other hand, the bottom fifth may be costing you more than they are worth. Don’t waste marketing dollars here. We don’t want to retain them.
How can the success of these programs be measured? The answer is in the lifetime value. Think in terms of LIFETIME VALUE of a customer and you’ll lift your vision ABOVE the transaction, lift your service ABOVE the blah ordinary, and lift your profits into the stratosphere!
People LOVE to be pampered, and this includes the people who are SPENDING LOTS OF THEIR MONEY WITH YOU!
Action Plan: Tweak (or CREATE!) your Lifetime Value Plan, start collecting profile data immediately and start (or continue) rewarding loyal clients and customers in creative, meaningful ways!
