In running any successful business you will know that you always ALWAYS need to be obsessing over the value you are providing to your customers.
The onboarding experience? The client management? The delivery of the service? THE results?
Are you providing disproportionate value to every customer at each stage and if not why not…?
That being said, today I wanted to share our insights over the last year looking at it from the other side…
Customer Lifetime Value and then consequently the Lifetime Value of staying in contact with your prospects or what we call your ‘FAN Lifetime Value’.
For the definition of what a FAN is take a look HERE
We had not thought about calculating this until last year when we realised our clients wanted to know what the value of staying engaged with their FANs would be them rather than simply contacting them a few times and then moving on for them to be forgotten forever
Firstly, Customer Lifetime Value (CLV)
There are many different ways to define Customer Lifetime Value depending on what type of business you are however the easiest definition we have come up with is the average total revenue a customer spends with you over the duration you are working together.
If you are a subscription business and your average client spend £2K per month and they stay for a minimum of 12 months your CLV will be £24K
Now, if you then work that back to the number of companies you met to win a new client and then back further to the number of companies you had to reach out to to get those meetings you will be able to work out the lifetime value of your prospects.
Lifetime Prospect Value is the value you would put on everyone you reach out to whether or not they immediately become a customer. Or to put it in Pitch121 language, the…
Lifetime FAN Value (LFV)
Why could Lifetime Fan Value be more relevant than Customer Lifetime Value?
One person that you connect with understands what you do. They may share your content with their network, with their colleagues but they don’t become a client.
Does this mean that the effort to nurture this FAN is zero?
We think not.
That FAN knows you, may even like and trust you as well, but the timing or the situation may not be quite right to work together.
Stay connected, then over time, situations change and providing you’ve stayed front of mine – known for your niche – then business comes.
We have been working out the Lifetime FAN Value your own copy so you can work out your own LFV then click on the link below
Once you’ve done so, what does this give you?
- Truth about how much you are really investing in your sales and marketing
- Understanding of any stats you don’t have, but you really ought to know
- A value for each FAN, so you know how much you can invest in order to reach them
Have a look at our sheet, we have also prepared a tutorial video.
We would love to hear your LFV!
Do also GET IN TOUCH if there are any additions or improvements we could make to the document.