Lifetime Value
This is a preview of a concept contained in The Personal MBA by Josh Kaufman, a book that will help you master the fundamentals of business, hone your business instincts, and save a fortune in tuition. The Personal MBA distills the most powerful principles of business and delivers them quickly and concisely. Order your copy now…
What is “Lifetime Value”?
“The purpose of a customer isn’t to get a sale. The purpose of a sale is to get a customer.” — Bill Glazer, advertising expert
Key Points:
- Lifetime Value is the total value of a customer’s business over the lifetime of their relationship with your company.
- The more they purchase from you, and the longer they stay with you, the better the value. the higher the Lifetime Value, the more you can do to keep them happy.
- By understanding how much a customer purchases and how long they stay with you, you can place a tangible value on each new customer.
- It’s much better to operate on markets with high Lifetime Value.
Questions for Consideration:
- What is the average lifetime value of a new customer for your business? Is it high or low?
- What could you do to increase the lifetime value?
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