Memecast #31: Think about the Lifetime Value of a Customer

<p><span style="font-weight: 400;">I don't really want you to just sit around and think about lifetime value. What I want you to do is think about lifetime value and how that influences your business, how that influences your pricing and your product development and your.</span></p> <p><span style="font-weight: 400;">If you're in a subscription-type business, this becomes so obvious. </span></p> <p><span style="font-weight: 400;">Because we need to win a new customer. We want to keep that customer. </span></p> <p><strong>"Think about the lifetime value of a customer. Think about it and then do something about it." - Mark Stiving</strong></p> <p><span style="font-weight: 400;">We want to grow that customer and we can start to think about if I could win a customer over their entire lifetime, how much revenue.</span></p> <p><span style="font-weight: 400;">How much profit do I think I'm going to end up getting from that customer?</span></p> <p><span style="font-weight: 400;">And SaaS companies or subscription companies actually do a pretty good job at this, but if you're not a subscription company, you should be thinking the exact same thing.</span></p> <p><span style="font-weight: 400;">You put out a lot of energy and money in order to win a new customer. You have a high customer acquisition cost. You obviously want the sale that you got. But can you think about that lifetime value? </span></p> <p><span style="font-weight: 400;">Can you get that person to buy more things from you to buy over and over again? And this has everything to do with how well we treat the customer, what our customer service looks like.</span></p> <p><span style="font-weight: 400;">Do we have follow-on products? Are we staying in touch with them? There are lots of reasons and things, decisions that we can make once we start focusing on the lifetime value of a customer. </span></p> <p><span style="font-weight: 400;">Think about it and then do something about it.</span></p> <p><span style="font-weight: 400;">We hope you enjoyed this podcast. If