One customer. Just one. What are they worth?
Have you stopped to think about the value of just one customer?
It’s said that our greatest cost goes into developing new customers. Why do you have a store? For customers. Why do you have a business card? For customers. Why do you have a website? For customers. Why do you go to work everyday? For customers.
That’s a lot of stuff just for a customer. In fact most of us don’t have enough customers. We want more!
So, why is just one customer so valuable?
Well, it’s because the customer is worth a lot more than we give credit too. In fact, the value of one customer is much greater than most of us realize.
I’ll use Jessica, my hair stylist as my example. Hi Jessica!
Ok, so Jessica charges $15 for my haircut and I happily give her $20 for the service.
So, my customer value? $20 right?
No, oh no, not even close.
You see, I started getting my haircut with Jessica 4 years ago. That’s the beginning of Jessica’s “just one customer” experience with me.
So, 10 haircut’s a year at $15 (but for me, $20) = $200 per year.
Ok, so 4 years at $200 = $800.
That’s the common expression of a customer’s “life-time” value. (The estimation of their value over time as a repeat visitor after becoming a customer.)
So just one customer, me in this case, is worth $800 to Jessica right?
A lot more.
Because of me, my two sons get their hair cut by Jessica too.
Let’s say that’s $400. Plus my wife get’s her hair cut with Jessica now. Let’s say that’s $400 too.
To Jessica, I’m easily worth $1600 as a customer not a measly $15 to $20.
And when you add to the fact that I tell other people to get their haircut with Jessica, my value continues to increase as a referral source.
This isn’t about haircuts.
It’s about you. Your business. And the value of just one customer.
I think it’s time to put pencil to paper and see if you value your current customer for what they are really worth.
Can you see the value in just one more customer?
Have you done the math?