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Blog Bling
Apr
26
Determine Lifetime Value of Small Business Customers
April 26, 2006 | Anita Campbell
In an article at B2B Marketing Trends, Lloyd Corder says there are seven questions to ask to measure the return on your marketing investment. Among them is this question:
7. Lifetime Customer Value (What is the value of a new customer over the lifetime of its business with our organization?)
A lot of marketing focuses on finding new customers. It’s an acquisition mind set, hard to sustain and can trick managers into thinking that the faster they acquire, the faster they will grow. The “lifetime customer value” philosophy says you should focus marketing on all that a customer could represent to your organization: revenue, referrals, advice on new products, help in defining your brand image and much more.
Do you know the lifetime value of your customers? That’s especially important when it comes to small business customers.
We’re tempted to think of small business customers as low value, because individual prices points are often low. But consider repeat purchases; cross-purchase business (such as personal purchases by the small business owner and staff if they’ve had a good experience with your company); word-of-mouth referrals of other small business owners, and so on.
When you add up all the benefit you get from a single small business customer over time, it can far exceed the value of that initial, small-dollar purchase. It may cause you to look at small business customers in a new light.
