91% see more profit in customer lifetime value
The lifetime value of an enquiry or potential customer, is dependent on a range of factors including:
- Conversion rates
- The average sales per transaction
- Margins secured
- Repeat purchase behaviour
- Referral behaviour
All five of these critical metrics are directly impacted by an organisations brand.
Consumers are more likely to be converted if they are familiar with and share values with the brand.
Consumers are more likely to buy more each time if they trust the brand and the people selling its products.
Trusted brands can change higher prices at secure higher margins because their customers will pay to buy a brand they trust or relate to.
Customer with an attachment to a brand are more likely to shop again and again. Apple secures most of its profits through repeat purchasing.
Referral is the outcome of a commitment to and satisfaction with a brand. Effective referral is also dependent on the referrer having something (a brand) to recommend)
Far too many businesses are focused on individual transactions when maximising profitability on a sustained basis is best served by focusing on life customer lifetime value. Such a focus increases income and reduces cost. Among other things repeat customers and referrals are cheaper to attract and spend more. They also refer more.
D. John Carlson – +61 (0) 402 273 350
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