Lifetime customer value says that marketing should be focused on the entirety a customer could represent to your organization. Unfortunately, so many companies think lifetime customer value is just about the sales that a customer will do with their business.
While your customers may not always need your services or need them as often as you’d like, they still have a lifetime value that goes beyond what they buy:
- Referrals (and their worth) to friends and family about using or shopping at your business.
- Advice, recommendations and other insights about new products and services to help you grow your business.
- Assistance with articulating and defining your organization’s brand image and offerings.
- Insights about how you stack up to your competitors.
- Your best opportunity to outlive your competition by continuing your relationship with them.
Unfortunately, most companies are so focused on finding the “next” customer because of a misguided belief that the faster a company acquires more customers, the faster it will grow. They forget about their existing customers and diminish their value.
While new customers are an important component of business, it is very difficult to sustain this acquisition philosophy and is very costly. Tapping into the value of existing customers is how you get customers to buy from you, buy often and in higher quantities—and bring you even more customers to grow your business.
This is the foundation on which my entire business, CorCom Inc., has been built.
It started with a few customers who first utilized my services. Those customers turned into referrals that led to more customers, which allowed me to grow the business. And those referrals turned into projects that have helped shape, define and grow our clientele and portfolio over the last 15 years.
While some of our customers have moved on to different roles that no longer require our services, they still continue to provide referrals and share information because they believe in and support the business.
Now that’s lifetime customer value!
Cultivating lifetime customer value is as simple as having a two-way conversation with your customers about your products or service. You must ask for and listen to their feedback via conversations, surveys, focus groups, etc. and be willing to do something with their feedback.
Your customers are essentially your business’s stakeholders. The more buy-in they have, the more value they offer. So make sure you’re keeping in touch via email marketing, rewarding your customers for choosing to do business with you and sending hand-written thank you notes when you can. Because in the end, lifetime customer value isn’t just about the money they spend with you. It’s about everything else!