maximizing the lifetime value of your

The true value of a customer is not in a one-off transaction, but lies in their full lifetime value. This means selling new products and services to them for many years to come. All great companies and brands follow this principle; just think of any leading company/brand you buy from and consider the number of times you have bought from them.How much money do you spend at your local supermarket each week? Now extend that over your lifetime and you can see it's a considerable amount. Very few businesses sell one-off products and services, or have zero ambition to try and sell again to the same customer.Even a carpet salesperson (a carpet is an infrequent purchase) would hope that you buy fom them again when you redecorate, or when the carpet wears out, or when you move home. Remember though, you would only buy again from that carpet shop if you still believed in them-AND they stocked the latest carpets and floor coverings which were relevant to you.The purpose of a business is to get a customerPeter Drucker, the famous management writer, said, "The purpose of a company is to 'get' a customer." It may be that your company needs to sell just one product or service to a new customer for them to start to build trust, confidence and belief in you. This may even be a low-cost transaction just to get the relationship established.From this initial sale you can demonstrate excellence in everything you do, eventually turning them into passionate fans who will buy more from you AND recommend you to their friends and family.When you're given the opportunity, you must WOW your customers and thrill them to the point where they're delighted with your company and they become a customer for life. Real growth comes from the lifetime value of a customerSelling to existing customers is much less expensive and therefore much more profitable than finding new ones, where the profit on the initial transaction could quite literally be wiped out by the marketing costs. It's often cited that it's 3-8 times cheaper to sell to an existing customer rather than to a new one.It's crucial for your business to develop a philosophy of thinking about the 'lifetime value' (LTV) of customers and to understand how to sell more to your existing client base.To maximise the LTV of a customer, you need more products and services to sell to them!To maximise the lifetime value of a customer requires you to be innovative, creative and adapt and respond to your customers' changing needs. It requires you to provide new products and services. This goes back to what we said in Session 1 about being an entrepreneurial company and always being relevant to your customers.When you put your customers first, you can enjoy multiple lifetime valueWhen you think of the long-term value of customers, every decision you make has to be for their good.When customers believe in you at a deep level, their lifetime value can extend over multiple lifetimes and through to their children and grandchildren (think Nordstrom).When a family has a strong affinity to your brand, they have no immediate reason to want to change to any other - always providing you maintain their belief through excellence and relevancy.If you do not put your customers' interests ahead of your own, or if at any time you become complacent and take your customers for granted, they will simply go to your competitors and you'll lose out on their LTV.

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