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Who Else Is Lying To Us About Total Customer Value?

By: Danie Baptiste

Greetings Entrepreneurs:

I have a question for you? Are you ready? Do you know what your total customer value is?

I'm sorry. I didn't catch that whisper. I'm almost certain a frog has found it's way into your throat.

Was that a "no" you muttered under your breath?

Well, my friend, you are not alone.

Read on.....

If you were to walk into a room filled with small business owners and asked them to write their assets on a piece of paper they would be quick to list such items as furniture, leasehold improvements, equipment, and inventory.

It's interesting to note here that very few would count their customers as assets and this is a big red flag as to the troubles that can be found in their businesses.

Take a look at every successful business and what you will find as the common thread is that the customer is not only perceived as but is the most important asset and is treated as such.

In order for you to fully embrace and 'own' this belief, you are going to have to sit down with notepad and pen in hand to figure out what your customer is worth to you. And while you're at it, go ahead and decide what your customer can or should be worth to you.

Let me create a scenario for you in order to further illustrate my point:

Think of all the businesses that counts you as a customer. Okay, if you are a woman, more than likely one of your favorite places to shop would be "ABC Shoes." Oh, just play along. I'm just having some fun. (wink)

I digress.....Alright, where was I?

Ahh, yes. You are a woman with an insatiable appetite for shoes that no therapy can cure, not even the kind that shocks you with electricity.

For a period of three or four years, you purchased well over half your massive inventory of shoes from this one shoe store: shoes you wear for the office, open toe shoes for casual walks on the boardwalks during the summer, shoes for all the all the times you were a maid of honor and the bride insisted that all shoes must be brand new.

She even required you to bring in the receipt to prove it! Oh, and let's not forget the red stiletto heels you wore in the bedroom because your lover begged you to. Is it just me or did it just get hot-hot in here?

Okay, back to business. I'm going to guess that over a period of three to four years of being a loyal customer to "ABC Shoes", that your average annual purchases at that store was $4000 (Imelda would be so proud of you). So, in four years, you were worth $16,000 in gross. Total of years = 4 X average annual purchase = $4000 yields $16,000.

Now, because you suffer from the incurable disease of "Being Attacked By Shoes", more than likely, this would have attracted others just like yourself. Women foaming at the mouth whom you referred to the store to temporarily fix their addictions.

I'll pick a number. I will say that you recommended three women to the store and each were worth at least half of what you spent per year. That number: $6,000 total.

Remember how you couldn't help yourself in recommending the shoe store to three women? Well, every single one of them has the potential of bringing in additional raving shoe maniacs, oops, I mean, customers they will run into at weddings and barbecues.

But for the sake of illustration, let's reduce that amount in which the additional customers they bring into the business is worth $1,300.00 a year, total. If you do the math, $11,300....$45,200.00 every four years.

Now that you have a better understanding of just how important your customers are to the success of your business....it can only improve your relationship with them and your bottom-line.

In my next article I'm going to share with you tips on how to build a brick house around your customers to keep them from ever wanting to leave you and committing the unforgivable sin of "competition adultery." The nerve!

Article Source: http://www.newagelivingarticles.com

Yves Marie Danie Baptiste is an expert in small business marketing, helping entrepreneurs with limited budgets to find creative ways to increase their profits without breaking the bank. Click here: Total Customer Value for more information on how to powerfully market your small business and increase your income.

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