How much is a customer worth to you?
The hardest and most expensive sale ever made to a customer is the first one. In that first critical transaction, we either earn or lose their trust. Once we have their trust, the door opens to many more sales and referrals, which most agree, are the very best new customers to get.
When you get a new client, do you ever consider what the potential lifetime value of that customer might be?
The lifetime value of a customer is a measure of the customer’s value to your business. It is the potential contribution of the customer to your business over a period of time. When you consider the lifetime value of a customer, you’ll have an idea of what you must do to keep that customer.
For example, many years ago I purchased a vehicle from a local car dealer. I liked the car and the service, so I bought a second one. When I had my second car in for servicing, I was told that the drain plug in the oil pan was stripped and I needed a new one. The dealer was the only shop that ever changed the oil on that car, yet they wanted me to pay to replace the one they stripped during service. After explaining this to them, they still charged me for the drain plug. The result? The $4 part lost them a loyal customer. It was the last car I ever bought from them.
Not only did they lose my business for the next 40 years, but any referrals I might have given them went out the window as well. They had me as a loyal customer, I was happy, and they let me get away over a $4 part. Geez.
What can you learn from this story? After all the effort you expend to obtain a customer, make sure you and your staff do what you can to keep them happy. Take a look at the potential lifetime value of that customer and do what it takes to keep them coming back.