Last week, I helped a client understand their company’s Lifetime Customer Value (LCV). From a marketing perspective, the key point is that each new customer is worth more to their business than just the first sale. In my client’s case, they could expect about five years of quantifiable revenue from each new customer.
This long-term mindset reminded me of a memorable comment from a high school classmate, Andrew Breton. He wrote, “You don’t buy a kitten. You get a lifetime supply of cat, with an introductory kitten offer.”
Knowing your business’ Lifetime Customer Value helps you decide how much you can spend to get each new customer, among other marketing benefits. Of course, it gets harder to figure out when you’re running a more complex business.
Have you tried to calculate your company’s LCV?