One big mistake that many business owners and consultants make is not understanding the true value of a client or customer.
A customer that pays you $500/mo or $5000 for a project is worth just that, right? Wrong!
It’s critical that you remember the Lifetime Customer Value of each client. LCV is the total value in dollars that each client will spend with you over their lifetime.
If your clients pay you just $500 a month, but on average stay with you for 3 years, each client is actually worth (their LCV) $18,000.
Why should you care?
The reason you must keep this splendid equation in your mind at all times is because it’s a game changer.
Knowing that each client is worth $18,000 to your business…you can confidently spend more money on your marketing (I’m guessing you’re spending no where near $18,000 per client on marketing) to bring in more leads.
And you can do so because you know that as long as you bring in a client at a lower cost than what they are worth, you’re going to make moolah!
Of course, if you’re in a service business there is a point of diminishing returns. The consideration of how much time you have available and how many clients you can handle.
Here’s another reason why LCV is so powerful…
How much are you spending right now on treating your clients like gold?
$50, $100, $500? If a client is worth $18,000 to you (many clients are worth many times more) don’t you think you could drop another $500 or $1000 over the lifetime of that client to pamper them? To make them feel special. To show them that you really care?
And when you do that, what do you think happens?
Right….your clients appreciate you more. They respect you more. They feel closer towards you. The relationship becomes stronger. Ultimately, the chances of them continuing to use your services increase.
You get the picture.