The Lifetime Value of a Customer

By Julie Bennett, Training Account Manager, Signature Worldwide

Growing up as a kid, I always watched the Jerry Lewis Telethon. My favorite part was when they rolled out the big tote board that would have all the donations added up. They would build the tension with an extended drum roll. I would watch the numbers flip, the expression on Jerry’s face—and then finally, the big number! All those individual donations, the corporate donations, everything rolled up into one huge number. Jerry’s message was that it wasn’t just about one company’s corporate check, it wasn’t just about one individual, it was about everybody and how everybody was valuable and what each person meant to the telethon. Jerry wanted everyone to pick up the phone and pledge…and they did—hour after hour, year after year.

I sometimes fantasize about walking around the grocery store with a tote board over my head—an invisible board only the staff could see. My own tote board, detailing how valuable I am to the store, how much I have spent through the years, exemplifying what my spending today means to them over the long haul.

How much have you spent at your grocery store? Averaging $100 a week, for 20 years, the big tote turns to $104,000. And that number only grows considering how many children you have, how often you cook, and the number of years you have been shopping. Does the person who checks you out treat you as if you are a member of the $100,000 club? On the other hand, do they treat you as if you are only spending $25 today? Do they care at all?

Do we sometimes look at our customers for their one transaction and not their lifetime value? Maybe they are only spending $100 for their room tonight, while others are paying twice that. Maybe our attitude toward them reflects that. Do we secretly wish they would understand that they shouldn’t expect so much when others are paying more? If we could see their personal tote board, what they have brought to us in the past and what they can bring in the future, we might treat them in a manner that says, “Thank you, we appreciate it.”

We know the statistics, right? Happy customers tell x number of people and unhappy people tell xx number of people. Yet, with social media, that statistic is a dinosaur. Our customers are communicating with each other in a manner that dwarfs anything ever done in the past…even without knowing who they are communicating with. The reality is, you never know. You never know if or when that customer will do business with you again, how often, and how many people they can influence. Have you considered how many people ask them about their vacation, business trip, or meeting? Can you imagine how many people are going to sites and giving their feedback…why? Because they can. Because it’s easy. Because it’s fast. And people pay attention…even complete strangers.

In sales, sometimes we get a smaller “yes” to get to a bigger “yes.” Clients try us out. They send us some of their people; give us a smaller meeting with the promise of future business, if we meet their expectations. Our clients put us to the test just as we do with people who want to do business with us. And they should. Because when we do things right, we will outshine the competitors and earn the business and the customer’s trust. We show them what we can do rather than simply telling them. Get the smaller “yes” and the smaller slice to win the whole pie later.

And yet, we know it can take a lot of work to get a “yes.” And more often than not, sometimes we might take a “no” or two or three, to get to a single “yes.” When you have that qualified lead, how many times do you follow up with your potential buyer? Once, twice, three times—then is it three strikes and they are out? Statistics show it takes on average a minimum of five client contacts to close a lead (Basho Strategies). Sometimes we have to endure that “no,” be persistent when others are lazier, cut corners, and give up to win the business. But do we give ourselves an out and excuse by justifying our behavior with “it’s just a couple of room nights; it’s only a $10K meeting.”

Of which I have to ask—how do you know? Or, do you just think and not know? It might be—you might be right, but you might be wrong. Show up, do the work, trust the process, land the business, and distinguish yourself from your competitors. See the potential in every piece of business, in every customer interaction, and then watch the big numbers roll on the tote board.

Julie Bennett is a training account manager for Signature Worldwide, a Dublin, OH-based company offering sales and customer service training, marketing, and mystery shopping services for a variety of service-based industries. For more information, call 800.398.0518 or visit www.signatureworldwide.com. You also can connect with Signature on Twitter @SignatureWorld and on Facebook.