The Question You Forget To Ask.
Here’s a question I bet you've not asked yourself recently:
“How much is a client worth?”
Is it that branding session for $120?
The logo, header and pdf design $2500 package?
Or the sharp $8,000 website development project ?
It’s all of them.
As clients begin working with you – and continue (because duh…you’re amazing) – their value to your business is increasing. Instead of a transactional value (that $120, $2500 or $8000) you can start to see a lifetime value developing.
A client’s direct lifetime value will be the total of all of the products or services they purchase from you.
A client’s indirect lifetime value will be the total of all of the referral business they send your way.
With delighted customers, those numbers can add up quickly – so isn’t it worth it to make sure you’re not missing out on some of that sweetness?
Here are my three go-to tips for how to make sure you’re maximizing your total client lifetime value.
Lifetime Value Hot Tip #1 - Play the long game.
If signing a new client, or having them walk away comes down to a negotiation over a relatively small amount of money, or potentially frivolous detail…think carefully about the decision to let the deal fall through. If you know that a happy client usually returns 2 or 3 times to work with you, you’re not really turning away just one payday – but potentially 3. If the project is right up your alley and the client’s personality is a fit, give yourself some extra leeway when closing the deal.
Lifetime Value Hot Tip #2 - Start well.
By the same token that cutting short a negotiation over something minor could cost you in the long run, it’s also important to set yourself up for success from day 1 when it comes to your prices. How you’ve priced your products and services will set the tone for how clients perceive your value for the rest of your relationship with them. Bring them in with bargain basement deals – and you’re likely to get stuck there. Double check that you don’t just have a strategy for where you’re taking your pricing, but also where you’re starting it.
Lifetime Value Hot Tip #3 - Create a strong foundation.
You know what sucks? Working with a client when you have a contract that’s full of loopholes and gaps. What sucks even more? Getting stuck using that contract for multiple projects because it’s the status quo you created and don’t know how to change. It’s worth investing extra time, effort and resources up front to secure a strong contract that’ll help you protect yourself and support the flow of how you do business.
With these 3 hot tips, and having (finally!) answered that revealing question, you'll be able to approach your client proposals, pitches and negotiations with a view to maximizing your overall client lifetime value.