The Lifetime Value Principle

Summary

The client/patient who just left your office will need to work with someone like you again.  But he won’t call you.

Why?

Because you are going to forget all about him.

That’s right.  You are going to ignore him now that your work is finished.

But he has more work.  And he has friends and family who could also be coming to see you.

But you will never know how valuable this relationship could have been because you have not given the concept of “lifetime value” any thought.

Transcript

I’m Dave Lorenzo and I’m the Chairman and Founder of Valtimax Consulting. Today we’re going to talk about lifetime value.

One of the things that always seem a little strange to me is that whenever one of our teams goes into a client organization on a consulting assignment and we look around, we find that people tend to ignore the folks who they just worked with.

It doesn’t matter if we go into a medical practice and we look at patients who were just seen by the doctor or in a law firm when we look at clients with whom the lawyer recently had a matter and they worked and it worked out really well or if it’s a large corporate organization that sells products or services. We tend to move on past the folks with whom we just worked and forget about them. There really is no depth of relationship and I have to tell you that this is one of the first areas that I as a consultant can go into a company and say, “Look, there’s business to be had right then there.”

What you have to do is you have to think about the relationship that you have with these folks beyond the first interaction and that’s what we call looking at the lifetime value of your relationships. Most people, once they give you their trust, will not hesitate to give you their trust again and that’s a phenomenally important point.

If you think about it, you have to get someone to invest their trust in you before they invest their money in you and who’s more likely to trust you a second time than someone with whom you worked in the past and for whom you’ve done an outstanding job.

If you’ve done great work for someone in the past, there’s absolutely no reason why they won’t recommend you to a friend or a family member and there’s no reason why they wouldn’t use your services again. So focusing on your long term relationships, focusing on the lifetime value of your relationships with your clients, patients, whoever your end user is, is critically important if you want to grow your business in the long term.

Ways to focus on lifetime value include communicating with the people who’ve used your services frequently and regularly and consistently and also occasionally inviting them back to use your services again.

When we work with dentists, one of the things we find is that most dentists don’t remind their patients when the right time for them to come back and have another exam is. Usually about every six months and most dentists don’t send out a reminder. You can easily remedy this by creating a tickler system or a filing system that reminds you to send out a reminder to a patient six months after their last appointment.

Doctors, internists as well. Annual physical reminders could be sent out 11 months after the last checkup so that they can call in and schedule an appointment 30 days in advance of their next checkup.

If you’re a lawyer, reminding people that you want to be contacted with any legal need is critically important even if you don’t handle that need because you can refer that business to someone else and that will result in more return referrals to you and your practice.

If you sell a product, for example if you sell a car, this is not the last car that person is ever going to buy. Staying in touch with them will not only result in more referrals from friends, family members, associates, people they come in contact with, but it will also result in the person buying their next car from you in three to five or seven years.

Keep in mind that relationships are what marketing is all about. Building and developing and deepening relationships, that’s what marketing is all about. If you think that marketing is about screaming and shouting on TV or billboards or bus stop benches or direct mail, you have to think again because those are all tactics used to either start or develop and deepen relationships.

The essence of marketing is about relationships. Keep that in mind. Keep lifetime value of those relationships in mind and you will find that growth is easier than you ever anticipated.

My name is Dave Lorenzo and if you would like more great information on building a business, you can find me and that information at Valtimax.com.