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TBT: Lifetime Value of a Customer

*It’s Throwback Thursday!  Today’s post was originally published in March 2014, about collecting your prospects’, customers’, and clients’ contact info and figuring out their LTV or Lifetime Value of a Customer.  (Did you know your best customers are you existing customers?!!)

Enjoy!


So, a customer comes into your business and buys a product from you. Do you know this customers name? Have they ever bought anything from you before? Are you thinking, “What’s a customer?” (yikes if you’re thinking the last one)

Well, if you’re like most small business, you have probably never thought about collecting contact info from your customers. BIG MISTAKE.

You see, customers who buy from you are your best customers! (TIP: It’s cheaper to market to a customer who has bought from you before than to get a new customer) They’ve been to your business, they’ve bought a product from you, and their sales barrier is knocked down, which means you can sell them more products.

But, if you don’t collect contact info from these customers, you’ll never be able to market directly to them, or know if your current marketing is working.

Here’s an example:

You own a restaurant and you put an ad in a local coupon magazine. The ad cost you $1,000 and brought in $255 (17 customers that spent $15 each). Sounds like a loser, no? Well, hold your horses.

Lifetime Value of a Customer (LTV)

What if only 5 of the customers came back weekly and bought $15 worth of food… Let’s see, 5 customers X $15 = $75 a week. Say those 5 customers keep coming back for a year every week. $75
X 52 weeks = $3,900. Now, tell me, does this ad look like a loser now? Of course not!

But… you’ll never know if your current marketing is working if you don’t collect contact info from your customers! Collect names, mailing addresses, emails, phone number… what ever you can.

You can put all of this information in a spread sheet or a contact manager and track how often this customer comes back.

What happens if they don’t come back for a few weeks? You can send them a personalized letter asking for them to come back with a special offer. You can send 3D Mail to them to get their attention.

If you don’t collect contact info from your customers you’ll never know why they decided to start going to a competitor for business, and you won’t be able to get them back. Yikes!

Are you currently collecting your customers’ contact info? If not, what’s stopping you? All you have to do is… ASK. You’ll be surprised how fast your contact list grows. Heck, even if you get one customer to give you their contact info a day means 365 contacts in a year. Well, what are you waiting for?!

Leave your answers and comments below.

Now go take action!

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