By Neal Glatt
When I was working to build a $40+ million snow business in seven years, there was one metric that I valued above all else. By focusing on this rarely discussed number alone, everything else - profitability, sales, retention - fell into place. I’m convinced that more businesses would grow more if they really understood the metric of Lifetime Customer Value. This number is the projected profit that a customer will bring to a business over the entire future relationship. There was almost nothing I wouldn’t do for a customer because I knew how tiny that cost would be when compared to the customer’s lifetime value. Everything I ever did for a customer was an attempt to grow the lifetime customer value and it enabled unprecedented sales and profit. Here’s how you can do it too.
First, never lose a customer. It is unbelievably expensive to acquire new customers. Consider all of the marketing and sales activity involved in winning a contact, the legal review, account set-up, the learning curve of first-year management, and the list goes on. Customer acquisition is costly and difficult. Companies lose big-time when they continue to churn customers and have to continue to pay these costs for replacement contracts year over year. Deliver over-the-top service and hold onto what you have won.
Second, grow your customers. Whenever you do a great job for a customer, look to grow their investment with your company. Whether it’s adding new locations, new services, or simply referring, every customer can always grow your business. Targeting customers with sales growth potential allowed this to always be the case for me in my career.
Third, dominate account management. The key to the first two steps is all about how the customer is managed. There will always be operational issues, but great account management can overcome them and turn these into trust-building opportunities. The customer relationship, when managed properly, is the sole key to keeping and growing lifetime customer value.
At GrowTheBench, we know that your key to business success is in the people you have and how they are grown. That’s why I’m so excited that we have launched Phil Harwood’s new course, The Ultimate Account Manager. It just may be the most important course you need for your people heading into snow season.
Tags: Value , Sales , Lifetime , Customer , Grow , Account Management ,