A brief Google search offered this, (from
https://piwik.pro/blog/customer-lifetime-value-important-for-your-business/)---------------------------
Why you should calculate customer lifetime value (CLV)
One of the key reasons for measuring CLV is customer retention. Marketing Metrics reveals that the probability of selling to a new prospective customer is 5%–20%, while the probability of selling to an existing customer is 60%–70%.
It means that selling more to repeat customers will bring significantly more profits. That also highlights the impact of promoting customer loyalty. Regular customers tend to spend more on your products, helping you grow and promote your business. According to a Criteo survey, 81% of marketers claim that monitoring CLV boosts sales.
But your customers aren't equal when it comes to revenue per customer, cost per acquisition, and other metrics. By measuring CLV you can better evaluate how much you should invest in retaining your customers. It also enables your organization to define marketing goals, plan spending to lower acquisition costs and keep retention high.
Moreover, you're able to allocate more resources to encourage customers to spend more over their lifetime with your brand.
CLV gives you a closer look at your business's health by taking a longer time frame into account. This gives a greater precision to determine whether your current acquisition and retention strategy is designed for scoring quick wins or supports steady and sustained growth.
Finally, customer lifetime value provides you with relevant information on your users and clients. It lets you answer some key questions, such as:
- How much should I spend to acquire a customer?
- How much should I invest to retain or win back my customers?
- How much time should my sales and marketing team spend on customer acquisition?
- Are my offers well-suited for my best customers?
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So. Obviously there is a big difference between a high-powered business seeking multi-national contracts, and what someone may be doing as a sole proprietor piano technician. For instance, I doubt many piano technicians have large marketing and sales teams...but I think the more one knows about business, the better.
I remember a teacher at a convention saying "most people forget one third of being a piano service business. Piano? Yes. Service? Check. But they forgot they are a business". After all, who wouldn't like to keep their best customers? And who likes spending money and time to get new ones? This is a metric that can help you evaluate how many customers are repeat, and how much work you are selling the average customer. In my experience, increasing both of these has led to more success.
Obviously keeping clients is great, but what about selling more to your current clients? Here, increased revenue is almost secondary. The real benefit of aspiring to offer more to my clients was that it forced (is forcing) me to learn more. To be better. To want to make pianos better. To better serve my clients, to better serve music, and it also happens to better serve my bottom line. There is a positive feedback loop at work.
So, if a piano tech is only doing tuning, but starts to really master regulation to sell to clients (of course only if the situation warrants it), there is so much satisfaction that comes from this growth. If you can nail most aspects of action regulation but don't offer voicing...there is your avenue for growth. The fact that some of the best in the profession are here, asking questions, learning...shows that there is no stop to the learning. And that learning can certainly extend in the direction of business, and we should not be ashamed to be striving to be better businessmen and women.
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Nicholas Litterski, RPT
Austin TX
512-573-8920
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Original Message:
Sent: 02-06-2022 07:19
From: Rex Roseman
Subject: Average Client Lifetime Value
Benjamin
I am curious as to the value of this figure. How is it used and what does it say (if anything) about the health of the business?
Rex
Original Message:
Sent: 2/5/2022 10:47:00 PM
From: Benjamin Sanchez
Subject: Average Client Lifetime Value
Hi All,
Just curious. What would you say your average lifetime client value is? For those of us who are Gazelle users, you got an email a few weeks ago with this number.
I would offer to share mine, but because I moved across the county last year the metrics are messed up (I split my CA and AL business). Thanks!
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Benjamin Sanchez, RPT
Piano Technician / Artisan
(256) 947-9999
www.professional-piano-services.com
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