SO, THE BIG QUESTION IS… “HOW
DO YOU COMMUNICATE WITH
YOUR CLIENTS ENOUGH SO THEY
DON’T FORGET ABOUT YOU?”
new Client because I know that several other things will happen over
the lifetime of my relationship with that Client. In many of my
events I’ll my Clients fill out the following chart for the “Lifetime
Value of a Client.” This shows the value of a Client for five years.
And, during that five-year period they refer five prospects of which
one of the prospects becomes a Client:
“Lifetime Value of a HAPPY Client”
Let’s look at a typical loyal Client…
A. Average First Sale = $300
B. Number of Years Client Buys = 5
C. Number of Sales Per Year = 1
D. Number of Referrals Per Client = 5
E. Percentage of Referrals That Become Clients = 20 percent
F. Gross Sales Per Year (A X C) = $300
G. Gross Sales Over Life of Client = $1,500
H. Number of Referrals That Become Clients (D X E) = 1
I. Gross Sales for Total Referrals (G X H) = $1,500
J. Total Value of Satisfied Client (G + I) = $3,000
Now I don’t know about you, but I think this example is very “eye
opening." That $300 sale is worth $3,000 in sales over a 5-year
period if you only make one sale per year to that Client. However,
I’m also being very conservative. I’m also not factoring in all the
additional sales of other products and services that you could sell to
your Clients. I didn’t even include a price increase over a five-year
period and this Client still represents $3,000 in business over a
five-year period.
In just a moment I’m going to show you how things can get real
optimistic, but first I need to show you the Lifetime Value of An
Unhappy Customer.
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