HOW TO CALCULATE THE LIFETIME VALUE OF A CUSTOMER
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The lifetime value of a customer is an easily overlooked and often underutilized concept. Don’t risk doing yourself and your business a huge disservice. Why track customer lifetime value, or CLV? When you know the CLV, you have data you can use to your advantage. This data can be applied to customer retention initiatives, marketing campaigns, referral programs, and, most importantly, keeping repeat customers happy. Plus, when you know the current CLV, you can work to improve that number. There are different ways to calculate CLV, and some methods are more complicated than others. At a minimum, you need to be tracking the following data points:
C. The initial cost of acquiring a customer
With this data, you can then calculate CLV:
A x B – C = CLV
Just keep in mind this number is based on averages and will not give you precise information (for a more comprehensive method of calculating CLV, check the Wikipedia entry for customer lifetime value). The more data you have to pull from, the more accurate the number will be. For instance, if you’ve been tracking A, B, and C for the past six years, you will have a more accurate picture of CLV than a business that started tracking last year. Think of it as an efficiency formula. With this data, you can determine which are your best customers and which are not. From there, you can tailor your marketing endeavors and get far more out of your marketing dollar.
A. The money spent by each customer (the revenue your business gains per customer, factoring in the margins of the products or services you provide)
B. The time frame for each customer purchase (the average amount of time you keep a customer)The initial cost to acquire a customer
CLIENT SPOTLIGHT BREAKTHROUGH INTENSIVE PHYSICAL THERAPY Helping Kids Achieve Greater Quality of Life
It’s been a long time coming, but this summer I opened my first business: Breakthrough Intensive Physical Therapy! I went from knowing very little about opening a business to more than I could have ever imagined — and it’s thanks to what I learned from Francine Love. I was initially put in contact with Francine through my business consultant. After I met with Francine, we sat down and talked about many of the details would go into getting my business off the ground. She was exceptionally helpful throughout the process and gave me all the resources I needed to set up a business entity. I knew right off the bat that working with Francine was the right choice. She was helpful every step of the way, and I am grateful. I had so many questions, and she was there to give me answers and to guide me to where I needed to be. And, she was incredibly patient! Now, I’m doing what I love: Helping kids and young adults become more independent. Breakthrough Intensive Physical Therapy is geared toward younger people with special needs, such as neurological disorders.
We offer a number of unique programs that many other PTs don’t. It all comes down to our specialized focus. Our goal is to help these kids achieve a better quality of life, as well as to reassure parents that more is possible — and it can be done through individualized treatment, one appointment at a time. Dr. Christine Astarita PT, DPT To learn more about Breakthrough Intensive Physical Therapy, as well the programs they offer, visit breakthroughptli.com.
Breakthrough Intensive Physical Therapy 1747 Veteran’s Memorial Highway Suite #21 Islandia, NY 11749
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