What Am I Worth To You?

It’s a perspective that I wish everyone had.  The Lifetime Value of a Customer.

Or to take it from the customers perspective, What Am I Worth To You?

Two items inspired me to write and podcast on this topic.  One was an article by Seth Godin. The other was a purchase I made recently.

And here’s what I want you to get out of this today…

Each individual customer is worth a heck of a lot more than you realize and the sooner we learn this the sooner we can make significant changes that will increase everyone’s value, including that of your business.

Here’s the quote from Seth:

We’re still clueless about lifetime value.

If an Apple upgrade breaks your phone and you switch to Android, it costs Apple more than $10,000.

If you switch supermarkets because a clerk was snide with you, it removes $50,000 from the store’s ongoing revenue.

If a kid has a lousy first grade teacher or is bullied throughout middle school, it might decrease his productivity for the rest of us by a million dollars.

Seth says it’s the little things that add up or more accurately multiply as either a gain or loss.

In 2001, my wife and I bought our first house together.  The house did not have central air and so I called a couple of heating and cooling contractors for estimates.  The first one sent a salesperson out who walked around our house, jotted down some notes and then sat down at our kitchen table and gave me his written estimate.  The dude was pretty quiet, didn’t ask any questions that I remember and never followed up until about a month later!

The other heating and cooling company sent the owner over to give us our estimate for central air.  He asked plenty of important questions and explained the process of what they would need to do since our house needed duct work for the central air.  His price was more than the first quote, but I went with him because of the way he presented himself.   I spent $8,000 on that central air job in 2001.

Four years later we moved and our new home had a combination hot water heater furnace that needed some repairs and eventually replacement.  We spent another $2000 on heating and cooling services during our 8 years in that house.

That’s $10,000 in customer value in furnace and air conditioner services in 12 years.  But wait, there’s more.

In 2014, we moved again and this house has a heat pump to take care of all of our heating and cooling needs.  That summer, around the 4th of July, we noticed it was getting very warm inside our house.  The last couple of experiences with our previous heating and air company were not the best so my wife suggested we contact one of the two we originally called in 2001.

The one that was able to make a service call right away got the job and it was the company that I did not use 13 years ago.  They came prepared with the part to fix our heat pump and the tech was great, much better than my previous experience with their former salesperson.  Over the past 4 years, I have spent a couple thousand dollars with them to fix some issues that ended up saving us money.

If you are counting, we are up to $12,000 that I’ve paid to various heating and cooling companies. However in June, I decided to replace our entire system that was 20 years old.  That’s another $11,000.

My personal Lifetime Customer Value to heating and cooling companies has been $23,000 since 2001.  I don’t expect to need to spend much more as long as we are in this house since I bought a top of the line heat pump that will take care of us for a long time.

That very first salesperson who was too quiet and lost the job never saw my Lifetime Customer Value.  He may have just thought of me as the dollars he would earn as his commission, I really don’t know.

The heating and cooling company that earned my trust has also earned my recommendation over and over again. I know at least three of my co-workers are regular customers including one that just bought a new furnace and central air for his home.  See, besides my personal Lifetime Customer Value, I also have value as a referral source for even more business.

So tell me, how do you assign worth and value to your potential customers?  Does your staff understand this concept?  Honestly, most don’t do they.  But that can change and it starts with you just like it starts with me when I do my work.

What am I worth to you?