What are your clients worth to your business and how do you acknowledge their custom?
Have you ever tried to quantify what a customer’s worth is to your business? Whilst some companies (generally those who raise sales orders and invoices) can track the monetary value of a customer, there are other businesses that do not – making it increasingly difficult to understand what value a specific customer brings to their business.
Most businesses will easily (I hope!) work through the basic formula of the average fee/sale per customer multiplied by the number of transactions they have with you each year, and then multiplied by the number of years you expect to work with them.
That is all simple enough – if you know these averages and key business metrics for your company.
But is that the total measure of what a good customer is worth to your business?
How many referrals to other great customers could you get from a really happy customer over the expected lifetime of the relationship? What extra value can be attached to your brand, or business value, from having great advocates in your clientele?
It is often difficult to understand the above fully, but if you are hands on within your business or have staff in place that can assist – you would generally be able to estimate the number of repeat sales and average sale value. By doing this, you will then be able to look at your customers and also prioritise their value to your business.
By understanding their value to your business (approximately), you now have a benchmark as to what that customer means to you and what you would need to do to replace that value should the customer choose to shop elsewhere. It is our recommendation that you reinforce your relationships to ensure that you do not have to replace old customers with new (hindering your growth).
At this time of year, it’s a great opportunity for you to take stock and acknowledge a customers’ value to your business. Branded Christmas gifts or even customised Christmas stationery (gift cards) and the like are a perfect way to say thank you and create an even more loyal customer to your business as we embark on 2013.