Do you think of the long term value of your customers?

So many people think short term when it comes to dealing with their customers or clients. They think in terms of making the sale and being done with it, as opposed to actually developing a relationship with their customers and making many more sales in the long term.

An example would be the Realtor who sells a person their very first home. Too often, the Realtor sees this as a one time sale so will do everything they can to make sure the buyer picks the most expensive home since that will result in the biggest commission. However, if the Realtor thinks long term, they will realize that if they help their client pick the best home FOR THEM and not necessarily the most expensive home, chances are, a number of years later, when the client needs a bigger home, or they need a better location, they will use the same Realtor. Having treated the client well the first time will result in the initial sale going through as well as the listing of the home later on, plus the commission on the next sale as well. The Realtor who only thinks short term might make a larger commission on the first sale but will probably not get the future listings or sales. The smarter Realtor thinks long term and this results not only in happier clients but also greater revenues.

Around 6 years ago, I was running a soccer web site and was sending out over 100,000 email newsletters a week. There was no cost to these newsletters and rarely any advertising (the only advertising was when I would announce a new book or a sale on soccer field equipment that I was selling). One day, I received an email from a subscriber who very politely asked me why I was writing these newsletters. He wrote that he appreciated them and learned a lot from them but didn’t understand why I took the time and effort to write these newsletters each day. While I didn’t know this individual, the name sounded familiar so I looked through my database and first I came across some records of some books he purchased from me. Then I saw where he had, over the course of the previous 2 years, purchased over $15,000 worth of soccer goals from me for his club. While he saw the “cost” of the newsletters as being $0, I realized that without the newsletters, he never would have bought these products from me. In his mind, the lifetime value of him as a subscriber was nothing while in my mind, the lifetime value of him as a subscriber was around $8000 (and growing).

Companies such as Amazon.com do a great job of increasing the lifetime value of each of their customers. If you purchase books from them, they will send follow up emails (if you give them permission) of other books you might be interested in purchasing. These aren’t random recommendations but rather, are related to the fields of your previous purchases.

Think short term and you MIGHT make one sale. Think long term and you WILL make many more sales.

Have a great day!

Lawrence

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