Are you looking to develop new clients? How much money do you spend to develop those clients?
Jay Abraham (http://abraham.com/) is one of my favorite business development people and he talks extensively about understanding the lifetime value of developing a new client. If you know the average lifetime value of a new client, you can determine how much money you have to spend developing new clients.
Recently I came across a formula that Harvard Business School Publishing had put together to help you figure out the lifetime value of each new client that I wanted to share with you. The formula is located here: http://hbsp.harvard.edu/multimedia/flashtools/cltv/index.html.
So why is this important to know? If you had a customer who came to you for some business cards. A $50 value at best, but in the conversation you find out that he controls the business cards for 20,000 people in his company would that influence how you approach this one order? If you answered no, please go visit Jay’s site or watch the video below.
In the same way if you know the lifetime value of a client, it helps you develop a strategy that will help you get more clients. I’ll be posting a few examples of successful client development strategies in the next few weeks.
