Lifetime Value

Is it more important to maximize initial profitability from a sale of your goods or service or to understand the true lifetime value of your customers?

If you could make a profit of $500 from a customer but in doing so you piss them off and lose them from ever dealing with you again, is that better then making a profit of $50 from that customer and knowing that for very little work, you can make an additional $50 in profit every month for an extended period of time from them?

Too often, we get so intent on maximizing the initial sale that we lose focus on the long term value of our customers. Realize that a happy customer, who returns many times can be worth a whole lot more to you then the one time sale that results in an unhappy customer.

Have a great day!