How One Company Increased Their Lifetime Customer Value from $50 to $500

What is your lifetime value for a customer? Not sure?

Let’s start with the definition. Per Wikipedia, the customer lifetime value “is the present value of the future cash flows attributed to the customer relationship.” So you want to know, What will this customer be worth to me over the entire time I sell to him or her? When you know this information, you can determine how much to spend acquiring new customers, and on advertising and marketing.

Yesterday I was thinking about one of my absolute favorite customers, Jeannie Krause-Taylor of We have been working together for years, first in one of my classes, then for individual coaching, and we created her blogsite.  Right now Jeannie is in my TLCforYourWebsite live course. Obviously, she has a tremendously high lifetime customer value for me (in addition to the fact that I love working with her)!

So which one of your clients has a high lifetime customer value for you? What could you do to convert more of your current clients to this level?

I’m reading the first chapter of a new book, Changing the Channel: 12 Easy Ways to Make Millions for Your Business.  The book is written by the gurus from one of the most successful information marketing businesses ever, Agora, Inc.  In this chapter, the author explains how the business started using direct mail to sell information products, and how they started using the Internet… and had disappointing results with profits going down!

But then they switched their approach, adding an email newsletter which educated its readers AND advertised the Agora products.

The authors explain how the buying curve shifted dramatically for two reasons: lots of free education/information in the newsletter and messages sent much more often. It used to cost them 50 cents to contact a customer; with the Internet and their e-mail newsletter, they could now contact them for a fraction of a penny.

As a result of this new process, the lifetime value of the customer increased almost tenfold in ten years, from $50 to $500!

What can you take away from this example?

  • What is the lifetime value of your customers? If you haven’t started tracking it, start today.
  • Do you have an email newsletter?
  • Does it give out outstanding education and information for your readers? If not, make some changes with the goal to be the best resource for your readers.
  • How often do you send your messages? It’s an interesting balance between determining how much contact is enough and how much is too much.
  • What other ways could you increase the value each customer provides?

Oh and if you want to read the book, you’ll get details on the 12 marketing channels Agora uses, along with their secrets for successful information marketing. Buy it here. I’m getting the Kindle version for my iPhone.

Do you have a favorite part of the book?

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