Two Really Important Numbers To Understand In Your Business…
- Posted by Sue
- On 7th April 2023
We all know that numbers are the language of business right?
There are two key numbers in business that I find not many business owners know…
1️⃣ Customer acquisition cost…
2️⃣ Lifetime value of a customer or client…
The idea of knowing these two key numbers is to drive your acquisition cost down and raise the lifetime value of your customers or clients…
Today I want to focus on the lifetime value of a customer…
If you already know yours well done you can stop reading here…
If you don’t or you’ve not looked at it for some time stick with me…
The best way I can explain this is with an example from my own life…
Now I shop in a certain supermarket and have done for 32 years…
On average I spend let’s say £100 per week (wish I could get a weeks shopping for £100 these days 🤪)
So 32 years at £100 a week equals £166,400 throw in an extra £1,000 per year for Christmas, birthdays Easter and general household ‘stuff’ like the kettle I replaced last week and suddenly that number is almost £200,000…
Let’s now assume I’m going to continue to use the same supermarket for another 20 years ( 🤞 I’ll still be pushing my trolley around in 20 years) and let’s assume my shopping will average out to £150 per week…
That’s £156,000 add that to the £200,000 and we have a grand total of £356,000 that’s more than a third of a million pounds…
Now if the staff in that supermarket really understood the value of my custom do you think they might be a little more customer service focused?
No longer am I a pain in the butt asking where they’ve moved xyz to…
✅ I am a valuable resource…
✅ I am helping keep the business functional…
✅ I am increasing the profits of the business…
✅ I am helping to keep people in jobs…
If you’ve never done this exercise I highly recommend it…
I suggest you do it with your team to help them understand just what that pain-in-the-butt customer is really worth to your business…
Need any help give me a shout I’m here to help
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