Tong: Customer lifetime value mining makes your profit doubled

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A lot of enterprises, accustomed to do one-time, in the constant search for new customers, which is restricting the development of an enterprise business fatal error. Such a lot of enterprises, do very tired, if your business is like this, then you need to seriously think about Tong today to discuss the topic: Customer lifetime Value mining.

First analyze a case and then we'll explore the method:

The United States host this industry competition is very strong, major domain name host providers are mainly through the joint marketing method to promote, but strangely, these hosts may give more commission than the product sales price. For example, Ixwebhosting, the U.S. main provider, they sell a host is unlimited space unlimited traffic, and give 15 independent ip,3 International domain name, you can put multiple sites, but also give more than 100 U.S. dollars adwords advertising coupons and so on. The price is very low, only 7.95 U.S. dollars a month, that is, only 95.4 dollars a year, but they give the Affiliate marketing Commission is how much? 95 dollars. If in accordance with the normal thinking of a calculation, they certainly lose money, because the sale of 95 of dollars of products, the Commission to promote the Alliance, but also to provide so many independent IP and international domain names, certainly lose money.

If ixwebhosting lose money, they are unlikely to do the top of the industry, they must make money. So how do they make money? Why do they want to make a seemingly "lose money" promotion?

Because: they value the customer's lifetime worth. From the first year, they do lose money, but most of the customers who buy their virtual hosts will use them for a long time. If a client uses their mainframe for 5 years, the five-year customer pays them 5 95 dollars, so they end up making money. Because they value the life of their customers, so they put a very high commission, almost the first year of sales to help them to promote the alliance members, because the Commission is very high, so many sites around the world will help it to promote, so he can in the fierce competition in the development of very fast, And it's getting bigger.

So what is customer lifetime value?

Customer lifetime value refers to the total amount of revenue that each purchaser may bring to the enterprise in the future. For example, you have 2000 stable customers, the average time they work with you is 2 years, and the net profit for the past two years is 1.5 million yuan.

Customer lifetime value can be calculated as: 1500 000 yuan/2,000 = 750 yuan.

This means that every new customer, on average, can bring you a profit of 750 yuan in two years.

If you don't have numbers, you need to actually estimate what your customer's lifetime value is, and when you know the customer's lifetime value, compare the value of the customer's first purchase of your product, and you'll find the big difference between them. Many enterprises, only to see the first value, and do not see customer lifetime value, so often do some more short-sighted behavior, restricting its sales growth.

Why is the first sales value and customer lifetime value much worse?

Because: trust is gradually established. For example, one of my students is selling jade, and he has a lot of repeat customers, he told me a situation, said that most of his new customers for the first time is only to buy one hundred or two hundred yuan of products, bought after feeling good, will buy him thousands of yuan, and even some old customers will directly buy him a value of tens of thousands of yuan of jade. If you think about it from the customer's point of view, you will do the same.

How to tap customer lifetime value to make the company's sales performance doubled?

1, customer lifetime value as a measure, improve your promotion Commission, promote more partners to help you expand your business

2, the development of back-end products, to provide customers with more products and services, to earn more sales revenue.

3, improve the quality of service, long-term retention of customers.

Interactive topics:

1, your enterprise's customer lifetime value is how much?

2. What percentage of your repeat customers?

3. What products and services do your customers need?

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