LIfetime Value of a Customer

posted in: Uncategorized | 0

Everything you do. Everything your business stands for should have only one goal. That’s to create a customer. A long term customer. So, I will ask you this important question: “What is the lifetime value of a customer?

How much money will a customer spend, and over what period of time?  Let’s do the math. If “Joe” buys a bike today for $600, and comes back 2 times this year, and maybe 2 more times during the next 2 years to spend $300, that means that he has spent $900 over a 3 year period. Avg $300 per year. Will he keep returning for 5 years? 10 years? or just fall off after the original bike purchase.  Take a minute and figure out your average customer’s lifetime value.

Now, suppose you do something to increase that lifetime value. He purchases a bottle with your name, a patch kit, you install your own brand of cage on his bike, he wears your brand of cycling shorts, your t-shirt. Now YOUR name is being seen by your customer, his family and friends, every time he looks at his bike. He has a footpump in his garage with your logo printed in large letters on the side. HIs favorite drinking glass in the kitchen  is the pint glass with your logo on it.

That customer will be YOURS forever.

Leave a Reply