by Amy Woodall
My morning routine consists of a trip to the coffee shop and placing an order for “the usual” 3 pump triple venti non-fat no-whip white mocha. It’s ridiculous right? Well, so is the price tag. One of those puppies cost a cool $6 each visit. While most times I’m greeted with a smile, a semi-spelled right name on my cup, and typically quick service, I bet the nice apron-wearing baristas have no clue what my or any other customer’s Lifetime Value (LTV) truly is.
In an effort to minimize unnecessary expenses I pulled out a calculator and did a little math. I visit this coffee shop an average of 4 times per week, each time purchasing a $6 cup of coffee, 4 x 6= $24. Wow! That’s the cost of a manicure! My curiosity continued and I bravely punched in a few more numbers. Okay, so if I’m spending $24 a week and there are approximately 4 weeks in a month 24 x 4=$96! So if I’m spending $96 a month, how much am I spending in a year? $96 x 12=$1,152….holy crap! My husband is going to kill me. It didn’t stop there. I had been purchasing this exact same drink for the last 5 years (thank goodness I didn’t calculate the calories) $1,152 x 5=$5,760. Yes folks I had spent the equivalent of a Disney Vacation on coffee. I had squandered away potential dreams of a lifetime for my children all for the quick thrill of caffeine. I selfishly admit….IT WAS WORTH IT!
As a consumer I knew exactly what my business was worth to the coffee shop, but do you think they knew? My LTV was actually well over $5,760. I had turned a few other friends on to my bad habit and they spent just as much, if not more, than I did. So, in fact my LTV was over $17,000, yet I’ve always been treated like a $6 cup of coffee.
What is the LTV of your average customer? Are you and your people treating them with the value of their initial transaction, or are you aware of the immense value they bring to your organization? Know their value before they do, or they may decide it’s an expense they no longer need.
At Sandler Training, Trustpointe we teach our clients the art of extraordinary customer experiences. To learn more about the lifetime value formula, ridiculous coffee orders, and calculator tricks (58008) contact Amy Woodall at (317) 845-0041 or Amy.Woodall@sandler.com
You might also be interested in:
