Lifetime Value of a Customer

December 18, 2016

Most businesses need to ensure ongoing education of their team on the lifetime value of a new customer.


Lifetime customers represent repeat business and repeat business equals profits:

  • Assume that the lifetime period of a customer is between 7 to 10 years on average.
  • Multiply the average sale by the number of times you expect to see that customer each year.
  • Multiply the projected annual sales by the number of years’ expectancy for ‘lifetime’

This will give you some idea as to what the customer is potentially worth to your business. This means that one of the most effective ways of making your business is to increase the number of visits that your long-term customers make to your premises, as this will add to the lifetime value of the customer.


To develop lifetime value of customers, you could consider the implementation of a referral system where current customers are encouraged to refer new people to your business with an appropriate incentive being given to the referrer. This could be a weekly lucky prize or a discount off a product in your business.

How to develop lifetime customers?

  • Improve your referral system
  • Create outstanding service to all customers to encourage them to become lifetime customers
  • Create a database of customers and offer them outstanding service
  • Keep improving the level of service to customers
  • Offer special events and promotions for your customers
  • Go the extra mile and get them to say ‘wow’!

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