How to Increase Customer Lifetime Value

How to Increase Customer Lifetime Value

Did you ever hear the expression Customer Life time value ? If you did what does it mean ? It means how much is the customer worth to your business. How much do they spend per week, per month per year. How often do they spend.

Simply put, Customer Lifetime Value = average spend per week x 52 x no of purchase years.

To increase the lifetime value of your customer. You either have to  increase the average $ spent or the number of times customers buy from you . It is therefore important to maximise the customer life time value at every point in the purchase cycle.

What is the first point of customer contact in your business? If it’s the telephone, is your receptionist pleasant, informative, caring and helpful? If it is a letter, is the recipient’s name spelled correctly? Is the information accurate? Does each point of contact establish customer satisfaction and ensure repeat business?

Let’s look at your customer service cycle. Draw a circle on a sheet of paper. Somewhere on the circle identify each point of contact from your customer’s point of view. Identify what customers want at each point of contact.

As you complete the documentation of your service cycle, look for the many opportunities where you fail to trigger the next step in your business relationship (creating repeat business). Up sell , cross sell etc.

Building the Service Cycle

In your old purchase cycle the customer service is probably a one-time event. Nothing has been designed to create momentum, to move the customer to the next step in the service cycle or to increase the $ spent.

In the new purchase cyclecustomer service is seen as a vehicle to build customer satisfaction, loyalty, and commitment. Besides which, Its not what you know about all your customers that makes the difference, but each one .What if your store mails a monthly coupon book to every customer within a certain radius of the store? Plus a weekly circular that lets customers double the value of of the coupons? Suddenly, you will find yourself clipping coupons and your business is building customers into its service cycle.

Its a purchase cycle designed to create satisfied customers and repeat business. Larger businesses can cater to customer needs with specialty offers for different items. Upon checkout customers often receive additional coupons good on their next visit. The cycle is reinforced when the packer carries out their purchases, loads them into their car and wishes them a nice day.

As an example lets see how important customer service in a grocery store? Look at these numbers. The average family spends $500 a month on groceries or $6,000 a year. Over a 20-year period, it adds up to a whopping $120,000. If you figure that 100 people go through a single checkout line every day, that means each cashier manages a potential $12 million portfolio of business. That point of contact (the cashier) can affect your business in ways you never imagined – for better or worse! What about your business? How can you increase the purchase cycle ?

If you are trying to figure out ways to increase your business and would like more information about this and other low cost business development strategies contact us today .

We have a wide range of tried and tested best practice techniques for your business .

We specialise in providing solutions that will meet your individual requirements .

Lets face it, as a business owner you cannot afford a hit and miss approach .

Our Better Business Institute management tools and coaching methods will get you to the next level at HiSpeed.

We offer a turnkey packaged solution that includes an affordable modern website design , best practice marketing and business process management aimed at getting results.

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  1. Are you serious about training as a coach? Then invest your time now in understanding what you need to learn will pay dividends in the future. You should always prefer proper coaching courses.

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