Money Metric: The Most Important Financial Figure in Business (LCV)

Should you scout for new clients or stay put with your existing clients? What should we prioritize?

In this latest episode of the Money Podcast, Rob sheds a light on what most business owners don’t really mind, the Lifetime Client Value, or LCV. Always take note that LCV is one of the valuable metrics to monitor if there is really any development or for the company. A company’s growth hugely relies on its customers/clients so it is best to maintain a tight and long-lasting bond with every customer. Discover today how you can easily do it without having to give up scouting for new clients.

There are many benefits of knowing and measuring your LCV. One is you can easily acquire new customers and retain the existing ones. Find out more on how LCV can help grow your business better when you tune in!

KEY TAKEAWAYS

• Track your metrics in your business. Some do not know how to generate leads and do not know the costs inside their business.
• Lifetime Client Value (LCV) is “the value to you in total per client for the lifetime of the client.” According to Rob, it is the most important metric in the business.
• Most serviced accommodation property owners target new clients. But it is also a good tactic to go back to the old clients for getting bookings. You already have a trusted relationship and, in this way, you also avoid paying special fees when use intermediaries (e.g. Airbnb.)
  • When you get large bookings (3-6 months), you’ve already increased the Lifetime Client Value (LCV) of that client.
• There are events where you can scout for new clients. Take note that Maximum Acquisition Cost should be 50% of the net profit of the client. So, you pay for the maximum acquisition cost in addition to the fee that gets the client to attend the event.
• It’s more efficient to go back to old clients and grow the lifetime client value. Once you’ve done your first deal with a client, it’s up to you what products and services shall you offer him to make him stick. You could dramatically increase the profit and reduce the marketing cost.
• The profit you gain when you’ve already increased your lifetime client value can be reinvested to your front-end marketing to get new clients.
• Test new market media to know what’s your new maximum acquisition cost and if you can generate leads. Remember also that not all client sources are the same.
• The happiest clients are the ones who are going to give you the best referrals.

BEST MOMENTS

• “If you don’t know to the pounds and pence what your lifetime client value is, then you have no idea whether you should be looking to acquire new clients… whether you should be looking to create new products and services to sell to your existing clients.”
• “Sometimes things are harder than you think and sometimes, things are easier than you think.”
• “A new customer is likely to be as 4x more expensive as an existing customer.”
• “Make sure that you invest a part of your profit back to marketing.”

VALUABLE RESOURCES

• Business Breakthrough Summit
• Multiple Stream of Property Income
• Airbnb
• The Money Podcast #054 ‘How to be a Billionaire’: Interview with Author & Wall Street Investor Martin Fridson | Stitcher | iTunes

ABOUT THE HOST

Rob Moore is the host of the UK’s no. 1 business podcast “The Disruptive Entrepreneur,” as well as an entrepreneur, property investor, property educator, and holder of 3 world records for public speaking. He is also the author of 9 business books, 5 UK bestsellers, and the global bestseller, Life Leverage.

“If you don't risk anything, you risk everything.”

CONTACT METHOD

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