Keeping customers for life – that’s valuable!

Listen to a Preview

Running Time: 8:52

Date: 01/06/2014

Calculating the lifetime value of your clients allows you to decide how much you can afford to spend acquiring more of them.

Many practices take a short-term view when analysing how profitable their clients are to their business. But Nick Schildberger says you should take a longer term view. Instead of looking at the break-even from one transaction, Nick suggests calculating the profit achieved over the lifetime that a client will spend with you.

He takes us through the simple calculation, and highlights the importance of including this information in your budgeting so you can make informed decisions about how much to invest to acquire new clients.

This longer term thinking also encourages better relationships with your customers, which in turn provides further opportunities to increase the value of your customers to your business.