What’s the value of a customer to your business?
The answer depends on how long a customer sticks around. One who makes a series of small purchases over 10 years could be worth a lot more than one who buys a big-ticket item one time. Regardless of how you calculate the numbers, it’s important to take the long view when considering customer value.
The creation of an efficient marketing engine begins by understanding the cost of a single lead (this is separate from the conversion rates we discussed earlier). When you know how much revenue a single customer brings you over the average amount of time they do business with you, the math about how much you should invest in finding new customers becomes much easier.
It’s commonplace to put digital marketing resources toward lead generation, but this can be a mistake when know you get more bang for your buck with existing leads and customers. Part of the reason organizations put so much focus on lead generation is that retention efforts are much harder.
Retaining customers is not an exact science, nor is there any single answer for how to achieve it. However, you can begin to get a clearer understanding of how much a customer is truly worth—and in turn determine your marketing efficiency—by blowing up the value of ONE of your leads.
Repeat Clients Are The Core Of Your Home Improvement Business
Home improvement businesses often leave a lot of money on the table simply by letting communication lapse once a sale is complete or the job is done. This is a shame because the numbers show it literally pays to create repeat clients through sustained communication.
Research shows that contacting an online lead within an hour of an inquiry improves a salesperson’s chance of a meaningful conversation by 7x. Yet, other research shows that salespeople give up too quickly.
Nearly half of salespeople quit following up with people after one attempt. More than 90% give up after four attempts.
That means communication, both early and often, can pay dividends for your business.
One option is to automate communication at certain stages of the buying process. This can work for new leads and returning customers. By automating your follow-ups with educational content or helpful resources, you improve your chances of not just converting new leads, but building loyalty with those who already do business with you. This goes a long way in building customer lifetime value.
It’s also important to point out that your most satisfied and loyal customers are also the ones most likely to refer friends and family. Giving them a steady stream of good, automated content makes it easy for them to share resources that spread the word about you.
In addition to automation, though, there are a couple of often simple, but overlooked strategies to take advantage of. Let’s take a look at how you can make online reviews and referrals a core part of your retention strategy in our next post, Getting the Money on the Table: Reviews and Referrals.
This post is an excerpt from our ebook “Don’t Stop at the Top: How to Create the Right Marketing Mix for Measurable ROI.” You can get your copy here.
Ready to turn more customers into repeat business? Talk to a Socius representative and we’ll help you out.