Knowing your client's lifetime value
is the key to continued sales

The cost and effort in acquiring new clients
is the same, whether they buy once or
several times. You can increase the lifetime value of a client by ensuring they stay with you longer and continue to purchase.
This can make a significant impact on future profitability and sales growth.

Business owners often look at sales turnover and profits on a weekly, monthly or
annual basis. By looking at revenue and profit per client, you start to appreciate their value. Knowing your client's lifetime value is the key to increasing frequency of purchase.

How to determine your client's
lifetime value

First, determine average number of annual purchases a client makes and how long they remain clients. They might buy three times a year and remain for three years. Then note the sale value and corresponding profit.
You now know the lifetime value.

With this information you can develop client and employee strategies to maximise sales. You can confidently reduce prices with
frequent orders. Offer special promotions because you know what your client is worth. You can motivate your sales people by
offering larger bonuses and commission.

Residual value is more than
accumulated profit

Residual value is more than just capitalising
on a client's financial value. It's about recognising the goodwill, confidence and trust you've established - your brand identity. You've also added new skills and knowledge
to your capability. This is a valuable and overlooked resource, which can be used to help new clients.

Publishing your capability

Your skills and knowledge can be expressed through tutorials, guides, special reports, newsletters, tape sets, seminars and presentations. Trade articles and case studies provide a good source for publishing how-to guides and creating lucrative back-end
sales products.