Existing customers provide the bulk of your profits. It’s more cost-effective to sell to existing customers, so your profitability is higher. However, the profitability of existing customers goes far beyond their current sales figures, and that’s what lifetime value (LTV) is all about. In my opinion, it’s nearly impossible to give away the business trying to do what’s best for your customer, because the dividends paid on your efforts always outweigh the investment.

BusinessDictionary.com defines Lifetime Value as, “Total profit (or loss) estimated to result from an ongoing business relationship with a customer over the life of relationship. Goods or services with high lifetime value may justify comparatively higher marketing expenditure and/or salesperson compensation. Also called lifetime proceeds.”

The most important thing to remember about LTV is that every customer represents the potential for cumulative sales. When you lose a customer, you lose not just that sale but every future sale as well. Repeat business doesn’t simply “speak” volumes about your company; it screams them. If you want to strengthen and grow your business, then it’s worth applying some over-the-top-customer-service glue to make your customers stick!