Customer lifetime value is key because selling to existing customers is 5 times cheaper. You already have the customers, so why spend tons and tons of money on acquisition?
Why are you launching new inbound campaigns and pumping out outrageous amounts of money into free content in exchange for personal customer data ( lead magnets) and custom-designed landing pages?
Now, make a simple equation :
Count all your existing customers and your total annual revenue from them. Add them up and divide by the total to find your average. That number is the average amount a single customer spends in a year.
While this isn't an exact way to calculate LTV, it's an fax lists estimate to give you an overview.
Now ask yourself:
I bet you could create an email with new ideas for your existing clients and sell them an additional $300 each month. In seconds. For just pennies on the dollar in terms of labor and tools.
With new and simple ideas, you can increase your LTV.
Here we tell you why it is important.