Most business owners know what a lifetime customer is – but calculating lifetime customer value is another story. It’s easy enough to determine what your ROI is on specific marketing keywords or facets of your campaigns – however, when it comes to calculating the lifetime value of customers, many businesses simply aren’t thinking long-term.
From the first customer a business brings in to the most recent, the product or service being sold and the customer’s relationship with the company work together to produce potential lifetime value. Large ticket items may only be purchased once – a good example being a home, a pool or the vacation of a lifetime – yet, many businesses don’t think about the value of current customers when it comes to referrals.
Calculating Lifetime Customer Value
The way to determine how much a lifetime customer can earn you is to first take an in-depth look at your product or service’s price point. Are customers likely to buy from you multiple times in the next few years? Have current or past customers already bought products from you multiple times?
A business with customers who already purchase regularly might consider canvassing them to understand what’s working. This is a great way to understand what sets any company apart from its competitors. Having a great relationship with current customers allows decision makers the opportunity to survey them or ask them personally about what they’d like to see more of. This is a great way to engage any customer base while deepening trust and personal relationships with current customers.
If there isn’t an opportunity for multiple purchases, a business can consider referrals. Many businesses don’t have referral data handy – so ensuring to ask current customers how they found the business can determine whether or not referrals are happening. Developing a referral program is a great way to increase customer base and turn one purchase into several.
Checking the Numbers
It’s often difficult to nail down whether or not a customer has lifetime value – particularly if a company has several orders coming in at any given time. The key to assessing lifetime value is to have the right tools in place. Marketing automation is a great way to do this – particularly if a company’s existing automation tools allow for tracking individual IP addresses and user data.
Marketing automation is quickly becoming an efficient tool for businesses due to how streamlined automation processes can be – including methods for validating lifetime business customers down to the penny. To find out more about how marketing automation services can help your business track and retain lifetime customers and referrals, contact Lead Liaison today.