By Nick Bayley, CEO, MYeMetrics
No doubt you’ve heard about customer lifetime value but more than likely you don’t know how to work it out.
Well, customer lifetime value is simply the amount of money on average that a customer will spend you for their lifetime.
Before I give you more information on that I need to mention something very important.
Do you know the definition of a customer?
You may think that as soon as a person buys from you then they are a customer. That could not be further from the truth.
A customer is someone who you expect to buy from you again.
Look, if you have one cheap $37 product and no other products after that then you’re not getting customers, you’re running a money making scheme.
That may seem a bit harsh, but I’m saying this in your best interests because for you to have a successful Internet business you must have multiple products. And generally you want your products to be moving up the price scale.
So if you have a $37 product as your first product then your next product should be about $97. Your next should be around $197. Your next should then be $497, and so on.
As you no doubt are aware, it’s tough to get a first time customer. So that’s why you need to treat them like gold and provide them with more products that help them even more.
How do you provide your customers with more products that will help them?
Simple…you ask them what they want.
Run surveys and ask your customers what future products they would like to see you create for them. Have a selection of products you’re thinking they would like and ask them to rank the products. Also ask them how best they would like to receive the products, i.e. digital, hard copy or both.
To get a good uptake on your survey give away a good bonus for those who complete it. Also, give the bonus a limit. For example, say that this bonus is only for the first 50 people that fill out the survey. After that the survey will be pulled down.
Once you find out what products/services your customers want then set about creating the first product/service on your list and release it. When you release it make sure you do a product launch where you build people up for the 'release' of your new product coming on the market. This will help you to get out of the gates fast with your new product.
Once you’ve launched your new product then include an email in your auto-responder sequence that goes to new customers so that after a set time e.g. 2 weeks for example, every new customers get’s an email about your other product.
If you set about a plan of continually creating new products that your customers actually want then your customer value will go up and up.
There’s just one problem with this. You can’t manage what you don’t measure. So if you want to improve your customer lifetime value you not only need to do what I’ve suggested, but you also need to track it to see if it’s working.
To do this you can do it manually, but that gets boring and time-consuming - not to mention it gets confusing fast. So the best way to do this is to get someone or something else to work out it for you.
Personally, I tried to outsource this type of work but that quickly turned into a nightmare. So instead I created a software solution that does it all for me. This is called MYeMetrics. You can find out more about that by going here and watching a free video:
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