Amanda Holges looks at 3 ways to understand & multiple your true Customer Value.
There are very few real one-off purchases. In truth, most businesses have a potential for repeat sales – but are you making the most of your opportunities, or are you wasting that future income?
By understanding what your customer’s true value is to you over their ‘lifetime’ with you, and looking at how you can further enhance that, you could be increasing both your income and their potential for future sales.
This tip is part of a series that look at the key issues I help with as part of my Mentoring & Masterminds. Check out the other videos in the series on my blog page.
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Full Transcription
– Today, we’re looking at three ways to understand and multiply your customers’ true value to you.
There are very few real one-off purchases. In truth, most businesses have a potential for repeat sales. But are you making the most of your opportunities or are you wasting that future income?
By understanding what you customers’ true value is to you over their lifetime with you and looking at how you can further enhance that, you could be increasing both your income and their potential for future sales.
And even if you have sold them that one-off item, there could be potential for further sales through referrals to others. If you have provided a great product and a service to go with it, then why wouldn’t they want to let others know too?
Let’s look at three ways you need to understand your customers’ potential and how to multiply your true customer value.
Number 1 – What is the ‘True Customer Lifetime Value’? Unless it really is just a one-off purchase, then you will have a Customer Lifetime Value. That’s the length of time that someone continues to buy from you. It may be a month, it could be a few months, or a few years. But when you consider the true value of a customer, you need to think about the length of time that they will be with you.
An initial sale may just be a few pounds, but over the course of a couple of years, this will become a significant amount. Retaining your customers longer is a direct way to increase your sales income. Look at how you could extend their customer lifetime with you to boost the future sales.
Number 2 – Referrals. If you have a great product or service, chances are that your customers will be pleased to talk about it and recommend you to others. Whether it is reviews, testimonials, or direct referrals, these are invaluable ways to boost your future sales from that original customer purchase.
Promote your desire for referrals and reviews and make it easy for your customers to do so. Provide the link, ask for the referral, perhaps even consider an incentive to both the existing customer and their new referral. But above all, ask.
Number 3 – Premium Products. Using the 80/20 rule, 20% of your customers would be willing to by a premium product and 20% of them would buy an even higher alternative. Are you giving them that opportunity?
Consider what other products or services your customers would want and offer that too. If you can’t provide it direct yourself, then collaborate with someone else that can. If you don’t know what your customers might want as an enhancement, then find out. Don’t make your customers find it somewhere else.
So, there you have it. Three ways to multiply the true value of your customers. Whether you are a product or a service provider, there is lots of scope.
This isn’t about the slog of having to find new customers. This is about achieving the most from the ones that you have, understanding the true value past that initial sale and providing the opportunities for that sale to multiply into further future sales.
If you want to calculate your current Customer Lifetime Value, and look at ways to multiply that, then download my worksheet, Multiplying Your True Customer Value, at amandaholges.co.uk/Customer-Value, and start looking at where you can enhance your sales revenues today.
In less than 15 minutes, you could have the figures that you need to understand your customers’ current value and how to directly enhance it further.
So, consider the three ways that you can enhance an initial sale to something more, by extending the Customer Lifetime Value, getting further sales from Recommendations, by offering Premium alternatives and up-sales.
And download my Multiplying Your True Customer Value now, at amandaholges.co.uk/Customer-Value, and start multiplying your sales revenue today.
In the next tip, ‘Increasing your marketing return on investment’, we’ll look at how knowing your customers’ true lifetime value can have a direct effect on where you market and how.
Until next time, speak soon.