I just read a post on Seth’s Blog about embracing lifetime values, and was immediately able to relate this to any number of industries. When I was selling security systems in Miami, my employer had years of data highlighting the lifetime value of every new client. Think about it – who changes alarm vendors once the system is installed? Their monitoring ran $ 24.95/month, but clients routinely stayed with them from six to seven years. Value adds were additional motion sensors, control panels, remotes and door contacts.
I wonder how many sales or support reps understand the real value of each shared, dedicated or colo sale, and how that drives the business as a whole? In the post, the lifetime value of new cell phone clients (on two year contracts) was estimated at $ 2000.00. I’ve been with my cell phone provider since 1997, and have grown from one to four phones.
Is there a lifetime value in web hosting?What do you estimate the lifetime value is (on average) of a month-to-month dedicated server client? What about the new 2U colo client, who someday grows to a full rack, or a cage?
Could you increase your client’s lifetime value?
The answer is, absolutely – under promise and over deliver. Empower your staff, from sales reps to the billing and support departments, to go that extra one percent in every contact they have with each client. Your goal should be to exceed your client’s expectations. This is the stuff of long term business relationships.
Bottom Line
If one of your clients left in a huff, would you surmise, ‘there goes a $ 20 client’ or ‘we just let $ 2000 walk out the door.
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