Home Entrepreneur How to retain customers longer by using the principle of long-term value

How to retain customers longer by using the principle of long-term value

Keeping customers cheaper is cheaper than finding new ones.

April 20, 2021

4 minutes of reading

Comments expressed by Businessmen the contributors are their own.

If you could keep the client for two years instead of two months, your profits would increase 12x with no extra effort, , sales or expenses. It is called “long term value“rule.

Not just holding It’s good for profit, but there are a host of other benefits as well:

  • Customers get better results because they stay longer.
  • They refer more people because they are used to working with you.
  • They are committed to working harder because of their long-term thinking.
  • Keeping customers is much less complicated and painful than constantly looking for new ones.
  • Basically, you can have one Without doing anything else, just keep existing customers that you would be happy with.

Let’s say you charge an average of $ 250 per month per customer. With a typical retention rate of four months (at the high end), that revenue is worth $ 1,000, minus any expenses you get from marketing.

If you keep that customer for 24 months, that’s $ 6,000 in revenue. That’s a 6x revenue increase – but it’s even more so, because profits increase the longer you keep customers. You don’t have to spend “start-up” costs to get them to your company or service, except for a nominal amount over the lifetime of the customer.

Related: The biggest mistake that entrepreneurs make? Believe They Are ‘Irreplaceable’

So why are customers quitting working with you?

First, there are unresolved reasons that account for less than 20% of customer separation. Eg:

  • Resettlement – Your customers move because of work or family circumstances.
  • Pregnancy – This may be temporary is absent, but the customer is still performing your service.
  • Finance – Your clients lose their jobs or have unforeseen expenses, medical or other methods. This is most likely out of your control, unless you do some of the return offers listed below.

Then there are factors under your control, which explains why more than 80% of customers are segregated. Situations like:

  • They find better service. Your customers are just satisfied with your service and they find something better, closer or cheaper.
  • Your service is no longer required. Your client has achieved their goals, made progress or want to do it themselves now. This is great, but you can still ask for help through maintenance programs.
  • Customers do not like your service, period. You will usually find out this pretty quickly. It is usually a matter of quality control rather than maintenance, but it can be both.
  • They don’t see results. Sometimes the client may stay for a while, but in the end, it will come to terms. You need to make sure that your customers are doing their part to get the results you want.
  • Not funny enough either . Customers come to you for motivation and for something they cannot do on their own. Keeping customers motivated and happy will lead them to basically forever because they can’t get there anywhere else.
  • They are not challenged. Challenges are an individual thing and while most of your clients will be in the beginner / intermediate stage, some will need more challenges.
  • Too challenging. Here, you run into the opposite – and even more common – problem, especially for first-time customers. Don’t overwhelm customers from day one. This will keep them from moving into your relationship. Make it easy for them, keep them motivated and motivated to want to continue.

Using the principle of “Lifetime value” will make a big difference in your business and allow you to not only retain customers for longer, but also make more money without constantly acquiring customers. A new customer.



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