Do you know the value of a client? Seriously, can you tell me what the average Lifetime Value (LV) of a client to your business is worth? If not, then THIS IS A MUST READ. Do you know how to retain a client and maximize their value? Do you have multiple strategic plans to get more business from your existing clients? If you went to business school, are an accountant, marketing savant, and/or savvy when it comes to finances then this high-level blog about client value and retention may be redundant. However still call us because we have multiple detailed funnel systems and can execute a variety of strategies for your business.

Instant/Initial Value (IV) of a client versus Lifetime Value (also known as Client Lifetime Value) is something that most SMB’s don’t consider. THIS IS VERY IMPORTANT. At Internet Business Ideas and Marketing LLC, this is something that we communicate with all our clients. Our team will teach our clients how to figure out this for their business. Most clients want an ROI (Return on Investment) while others may just want brand awareness. Regardless of the desired outcome this is an important conversation to have. We supply a detailed questionnaire and kick off call that covers all this and more when you are a client of Ibi Marketing.

Initial Value (IV) is when that client makes a purchase for the first time. Lifetime Value (LV or CLV) is the value of that client beyond just one purchase but a lifetime worth. Every client should be viewed in terms of lifetime value. If you don’t know your average order value then you need to do so immediately. The “abbreviated” formula is to take your gross revenue over the last 12 months (since it’s during the pandemic I would do 24 months to be more realistic) then divide the gross revenue by the number of orders. This is your average order value. Although this is only for the past 24 months a business should extrapolate and know how long the average client will purchase their product over their lifetime. Here’s an example which works with all industries.

EXAMPLE: A restaurant with the average order value of $40. This could be a family or an individual regardless the order is when you ring up an invoice. The average client comes back at least 3x per month/36 times per year. Client is worth $120/month or $1,440 per year.

How you should determine of CLV. For this example, I only used a year but you should use the “lifetime” that an average customer utilizes your services. You should be able to answer these questions:

· How many times has a client visited your establishment (in years)?

· What percentage of clients refer your business?

· What percentage of those referrals purchase your product?

· What percentage of those referrals refer your business?

Just by answering those questions you will see the lifetime value of a customer skyrocket.

I will give you a low-ball estimate in this example:

· The restaurant has 1,800 customers per month. However only 60% visit on average of 3x per month over the last 5 years. $40 per visit. That is $7,776,000.

· Due to Ibi Marketing strategies 80% of regular clients give an average of 4 referrals (new clients) over their lifetime. That is at least 3,200 extra clients per month. Spending $40 per visit is $128,000 per month and $1,536,000 per year. That is $7,680,000 over 5 years.

· This is an extremely low-ball estimate of $12,000,000 over just 5 years. NOT LIFETIME VALUE.

Do you see why having a proper Ibi Marketing strategy is vital to the growth of a business? Do you really see why customer service and the value of keeping a client is so important?

Our goal at Ibi Marketing to give every client a positive ROI, increase brand awareness, and much more per our mission statement. There are many more ways we assist in helping you earn higher revenues. Here are a few examples we did for this restaurant client:

Mobile App- Gave digital rewards card (buy 4 get one free). Gave VIP digital cards. Order online via app. Have your ads show up on client’s phone whenever they are in the vicinity of your location or if you have something special to offer. Get reservations and set appointments. Great offer via text notifications for only those who have the app. Easy access to all services that you offer and they can refer your business at a click of a button. Click here for an estimate of building your own app.

Social Media- Have clients write reviews on your platforms. Offer something special only for Social Media followers. Imagine having a dedicated following who is looking forward to your next news flash otherwise know as a post or tweet. Lifetime of a captive audience and referral source. Find out more about SMM by contacting us today.

Website, SEO, and PPC- A website is your 24/7 sales representative and your website should reflect that. Search Engine Optimization and Pay Per Click marketing allows to have your product and services seen all over the world wide web. When someone goes to your website, we have a lot of options that continue to reach out to your client regardless if they purchased your product. One way is a detailed remarketing strategy which will follow your client around for many weeks showing your relevant ad.

As I mentioned in the beginning of this blog, this is a high-level explanation of why it’s important to know what is the Lifetime value of your client and how to maximize their loyalty. For a specific strategy for your business contact us immediately.