Why Understanding The Total Lifetime Value Of Customer Formula Is So Critically Important!
(To Your Long Term Success!)
So it’s definitely no mystery why, most semi cash starved, small business owners and or service providers, seem to operate, at least partially in the dark?
Especially when it comes to accurately forecasting, how much they really can afford to invest.
In order to consistently generate, the all important, first time customer/client and or patient, right?
In fact, if you were to ask a staggering 95% of them or more, what is the typical, total lifetime value of a customer formula calculations.
The vast majority of them, would have to sheepishly admit, they currently have no realistic idea whatsoever.
And based on these all too sobering facts.Is it any wonder why, they clearly have no realistic idea, how much they can safely afford to spend/invest, in order to consistently generate, their first time customer,client and or patient?
If the above describes your current situation. Congratulations!Huh? Because you are definitely in the right place, in order to fix it asap!
So Why Is Understanding The Very Basics Of This Total Lifetime Value Of A Customer Formula So Critically Important To Your Long Term Success!
It’s a great and extremely fundamental question. And (hopefully), in order to fully demonstrate, the bare bone basics to you.
Let’s suppose, you currently run, your very own, Mom & pop style, single location, fairly upscale hair and or nail salon.
And let’s say your typical long term repeat customer, (on average), drops in once every 90 days.
Or basically once every quarter. And when they do, it’s usually, to get their wash, shampoo, rinse and tuck treatment.
And typically they’ll gladly spend $90 (or X) amount of dollars, in order to do so. And since they normally come in at least four times per year, and remain one of your ideal, extremely loyal customers, for at least 60 months or five years.
(12 months x 5 years = a grand total of 60 months.)
Your Sales Funnel Is Typically Made Up Of Some Extremely Under Utilized Assets Of All Kinds!
Case in point. Since your ideal customer, is worth, on the initial front end only, on an annual basis. They represent $360 dollars gross per year. ($90 dollars per visit, times four annual visits per year.)
And since on average, you net about 70 (or X%) of the $90 dollars. This means each quarterly visit is worth about $63 dollars. ($90 x .70% = $63 dollars per visit x four visits per year equals $252 dollars.
Now multiply $252 times five, and you should get something extremely close to $1,260 dollars, correct? ($252 x 5 = $1,260)
Pretty standard, straight forward stuff thus far,correct?
Your Marketing Funnel Can Definitely Afford To Create Some Multiple Streams Of Income Producing Opportunities!
(Extremely important note: These next two semi advanced marketing variations, will never, ever be applied, by a staggering 98% of the eyeballs, who ultimately get exposed to them!) So not to worry about massive exposure. 😀
However, this is not a valid reason, to not expose the remaining two percent, to what’s truly possible.
This said. Let’s say because you’re now an extremely marketing savvy hair and or nail salon owner. And you realize full well, what the total lifetime value of a customer formula, can and definitely will mean (over time!) to your bottom line.
Often The Direct Sales Approach Is Definitely The Way To Go!
Since your idea customer is worth (on average), about $252 dollars per year. (Or a net gross front end profit of $63 dollars per visit, remember?)
What if you knew, one of your most loyal customers, was about to celebrate, their 15 (or X year)wedding anniversary.
And you really wanted to do something, (not only incredibly nice!) But you also wanted to strategically leverage, both her professional and or personal inner circle networks!
And generate, a ton of viral, positive word of mouth buzz.Plus generate a ton of social media chatter too.For literally pennies on the dollar!
Give Some Of Your Very Best Entrepreneurial Ideas And Or Strategies A Chance To Work For Not Against You!
And since she’s a registered nurse. And works in a local hospital, along with tons of other local nurses, doctors and other extremely high level administrators.
And you’d definitely like to leverage her professional and personal networks, for literally pennies on the dollar.
Here’s three potentially viable marketing strategies, you might implement. In order to accomplish your overall goals.
A Really Simple Marketing Funnel May Initially Be All You Need! Right?
First.) Since your total lifetime value of a customer formula, definitely shows you can afford to. Why not purchase a really nice meal, (which typically cost), $175 dollars!
For her and her spouse, to be serenaded, at one of the top local restaurants! On their special day! Pretty cool, right?
Second.) Next, provide her with an extremely time sensitive discount coupon, so she can go to an extremely popular, retail jeweler, you currently have some sort of joint venture (JV) relationship with.
And purchase, some beautiful diamond studded earrings! Which typically retail for $350 (or X dollars) a pair! But you only pay the jewelers actual hard cost of $125 dollars! Or X! 😀
Your Sales Funnel Once It’s Properly Set Up Can Literally Work Overtime For You And Or Your Major Competitors!
Third.) And finally, send her a dozen roses, plus a five foot teddy bear, directly to her job! 😀 You can you say social media explosion, can’t you! 😀
And let’s say this is an additional $150 dollars! So your total cost, is $125 + $150 + $175 = $450 dollars.
Now subtract this grand total from your estimated, total lifetime value of a customer formula. Which as you recall, (for this) particular example only, $1,260 dollars remember? ($1,260 – $450= $810!)
Plus all the goodwill, and extremely positive word of mouth and mouse buzz! Correct? 😀
Are You Definitely Starting To See And Appreciate How And Where Your Creative Entrepreneurial Ideas Fit Into the Big Picture!
And hopefully, you can see and better appreciate, how understanding the total lifetime value of a customer formula, potentially gives you and or your major competitors, a slight edge! Don’t you agree?
P.S.Now as is customary during this part of our show.
Please share your extremely valuable comments (in the comments section below) that you can
apply to your business, product or service in the next 30 days or less!
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