business coach, business growth, results, business strategy

Do you know the difference between the initial value of a client and long term value of a client?  When people first start working with you, are you offering a higher value service that might be a one time purchase? Or are you setting yourself up to build long term loyalty with this client?  Let’s discuss the initial vs. long term value of a client.

 

What’s the difference?

Initial value means that one time initial purchase. The long term value of a client means that client is a recurring loyalty based purchase.  That means they continue to make purchases again and again or stay on retainer with you. 

 

Story time- you know I love a good story.

I have a client who was creating a new product. We were discussing it, and I asked her what she thought the price point for this product would be. She replied with a price point that I thought was a little bit higher than I would have expected. 

The reason I say that is because the overall strategy for the creation of this product was to build the know, like, trust factor. It was to give her audience a lower price point offer to work with her. It would make it so they could see her value and the expertise that she brings to the table with the intention that they would continue working with her and need more strategy based on what she offers. 

Do not feel bad about encouraging your clients to continue working with you. You’re providing a service for them. They’re stuck! You have a zone of genius that they don’t have. 

 

Let me give you another example just for good measure.

I have a client who came to me four years ago through a Black Friday special with my business plan program. I run it every year. That year I think I ran it on special for $97, which is a very low entry point.  She didn’t know me.  She didn’t know what I brought to the table. We had had some conversation, but she had never seen my work in action. 

She purchased this biz plan program.   Because she was able to get in and get to know me at that lower entry price point, she has been on retainer with me, meaning consistently working with me as a client retainer basis for four years now. So when you look at the long term value of this client, it far out exceeds the initial value.

I could have priced that program at a much higher price point, but what is the chance that someone is going to continue to do business with you?  This is the difference between what business model you have. Do you have a business model that is one time quantity based?  Meaning you need a quantity of people purchasing and it’s a one time deal. Or is your business model based on that long term recurring loyalty based client? 

 

This applies to both product and service based businesses.

If you are a product based business, there’s a lot of ways that you can continue to add on to what they’re needing. Here’s an example, if you sell makeup, and they only buy mascara from you at first. Now they love mascara, and they might try eyeliner. 

If you’re a service based business like a virtual assistant.   Originally the client hired you for one email marketing campaign a month. You knocked it out of the park, and now they add on.  They have you doing their social media management as well. 

 

Loyalty= larger value

Think about this the next time you’re creating something or pricing a product. You don’t always have to go in at the top price. Think about what it is that you can do to knock this out of the park to create loyalty. 

The long term loyalty base value of a client is much larger than that initial entry point of the original purchase. I don’t want you to feel like just because you’re giving somebody a smaller or a less expensive option, that that’s the only thing they’re ever going to purchase from you. It’s on you to create loyalty for them to want to continue to be a recurring loyalty based client.  It’s on you to give you that lifetime long term value that will far exceed that initial value. 

Think about this the next time you’re creating something or pricing a product. You don’t always have to go in at the top price. Think about what it is that you can do to knock this out of the park to create loyalty.

 

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Connect with Michelle-

Website – https://michelledenioconsulting.com
Facebook Profile – https://www.facebook.com/MichelleDeNioBizStrategist/
Linkedin Profile – https://www.linkedin.com/in/michelledenio/

 

Have Questions? Let’s have a Cup of Virtual Coffee!

 

 

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