What Do You Know About Your Customers

  • How many customers do you have? How many are repeat customers? How many have only bought once?
  • How many customers have you lost in the past year?
  • How many customers have you retained in the last year?
  • Do you calculate the Life Time Value (LTV) for each of your customers? Do you calculate profitability for each of your customers? If so, do you then grade them according to their value in the company, with the intention of moving customers up on the continuum? Do you know who your most profitable customers are? And why they are profitable?
  • How many customers have you upgraded in the past year (cross-sell, upsell or moved into a new category)? Many companies ‘grade’ customers; customers with the highest LTV are ‘A’ customers, ones with the next highest LTV are ‘B’ customers and so on. Ideally the object should be to move Cs to B status, Bs to an A and so on.
  • How much of your customers’ ‘share of wallet’ do you get? Do you get all the possible business you can?
  • How many referrals or testimonials did customers give you last year?
  • When customers leave why do they leave? (Just because they tell you it was about price doesn’t mean that’s really what it was about. Often it’s about value, but when customers don’t have a language to articulate that, it sounds like, "The price was too high.")
  • How much does it cost you to get new customers? (Sales, marketing, advertising)
  • How long does it take for a new customer to become profitable – or to recoup what you’ve spent to acquire them? What happens to your acquisition costs if you lose customers before that period of time? Do you know how many new customers leave before you’ve broken even on the cost of getting them? Obviously losing customers costs companies a whole lotta money – but how much? What is the cost of failure when you don’t consciously build long-term relationships with customers?
  • How much does it cost to replace good customers after they’ve left?
  • What is attrition costing you?
  • How does the number of incoming customers compare with the number of outgoing ones? What percentage of your customer base are you actually losing on an ongoing basis? (If you’re losing 30% and replacing 30% of customers every year, that means only 40% of your customer base is stable – so how reliable and proficient can your research possibly be? Be cautious if you’re making sweeping decisions based on this small percentage of customers.)
  • What are your customers’ top three (current) expectations?
  • How many dollars would drop to your bottom line if you could keep only 5% of the profitable customers you currently lose?

Source: Numbers, Numbers, Numbers by JoAnna Brandi | CEO Refresher, November 2009

Like this content? Why not share it?
Share on FacebookTweet about this on TwitterGoogle+Share on LinkedInBuffer this pagePin on PinterestShare on Redditshare on TumblrShare on StumbleUpon

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.