Customer Lifetime Value (CLV) measures the profit from a customer across the lifetime of the relationship.
Customer Lifetime Value is a metric for assessing the long-term health of a SAAS and subscription businesses.
You can use this metric to encourage your staff to play “the long game” in business.
What happens the first time your customer logs into your SAAS or membership site? Will they be successful…. that is, “activated” …or will they give up .. and conclude “It’s too complicated”… or “This product just doesn’t work for me”?
How can we make early adoption simpler?
Increase your customer activation rate for new customers and you just pulled the biggest lever you have in your SAAS and Membership business RETENTION toolkit.
It was March and I was presenting at our Company’s User Group Conference.
Should I have spoken about a general topic that interested all attendees?
Absolutely not!
Because then NOBODY in the audience would have been engaged.
I’ll show you the 6-Step “NICHE DOWN” plan that I used to grow an 8-Figure business that competed with “FREE” products …
WHAT HAPPENS WHEN YOU NICHE DOWN?
You become highly differentiated in your niche.
You attract qualified people in your niche.
You don’t have to worry about price pressure.
You use your niche as a springboard to scale into an adjacent niche, a great strategy for a startup company.
The reality was staring me right in the face, as I peered at our Year on Year sales numbers.
I was seeing more GROWTH from EXISTING customers … than I was from closing NEW customers.
Not surprising for a mature product line
But hold your horses !
What about that brand spanking new product line that you just launched?
What about Start-up businesses getting off the ground?
Should they first focus on retention or upon closing new customers?
You see, there’s a shift in your sales and marketing approach that you need to make.
Indeed, a Bain & Co. and Harvard Business Review study estimates a 5% increase in retention results in 25% – 100% increase in profits
The answer is that you need to ingrain a customer retention program in your day to day operations and do it as quickly as possible, at the SAME time that you are growing your new customer base.
I was bringing a new version of my set top box chip-set to market … and we had major competition.
To a customer, choice is a brilliant thing …
But to a business manager like myself, I now could look forward to a longer sales cycle, more customer retention efforts …. and… worse still, pricing pressure.
You see, in the hardware business, we would soak up millions in upfront product development and test costs..
…. So margins mattered.
What would stop CUSTOMERS from seeing us as a commodity?
The answer lay in stacking the value that I delivered.
An ECOSYSTEM
… That made customers more competitive – A win for them.
… That increased organic account growth and my products’ stickiness – A business win for me.
You are at a networking mixer event. The room is full of strangers who are potential new clients…. You know no-one. What should you do next?
Answer: Strike up a conversation with each person about their favorite topic… Themselves. And then help them
When you connect on LinkedIn, it’s no different. Solve a problem for someone new – And you will develop a deep, long-lasting relationship.
Do these 4 things systematically on LinkedIn and you will reap new business without being salesy…… And the good news? Most of it can be automated …