Commercial Roof - Customer Lifetime Value Explained
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Transcript of Commercial Roof - Customer Lifetime Value Explained
What is Customer Lifetime Value?
By: Lateef Farooqui
Customer Lifetime Value
CLTV attempts to determine the economic value a customer brings over their “lifetime” with the business.
Single vs. Multiple Transactions
vs.
To understand CLTV you must recognize
that a customer represents more than
just a singular transaction.
Cost to Acquire
Cost to Serve
Cost to Retain
Cost to Upsell
Lifetime Value
Lifetime Value Cycle
“Rather it’s a relationship that is far more valuable than any one-time
exchange.”
Why does this matter to a Commercial Roofer?
By: Lateef Farooqui
Commercial Roofers Value
CLTV is important to Roofers that want to increase revenues, decrease costs, stabilize
income, predict revenues, and perhaps even sell their business.
“Secure the future profits of your business, by securing your past
and present clients”
Cost to Retain Customers
Typically it costs less than $15 per year to maintain a customer with no additional revenues.*
Customer roofs generally mature to next full-replacement within 10 years or a $150 total budget for next sale!
Service and Maintenance Agreement work can offset this cost and actually become a sustainable source of income
for your operations.
*Based on 1000 roofs (lifetime) and a $15,000 year budget for customer retention.
The Difference Between Roofers
Typical Successful
Typical Roofing Sale Cycle
Acquire
Deliver
Collect
Forget
New customer’s are the most expensive ones to acquire and service:
• Full Sales Commissions Costs• New Lead Generation Costs• Require Most Support
Successful Roofing Sale Cycle
Acquire
Deliver
Collect
Maintain
Service
Nurture
Existing customer’s are the least expensive ones to acquire and service:
• Partial or No Sales Commissions Lead Nurturing Costs are min.
• Require Less Support• Service Call Revenues• Maintenance Agreement Revenues• Partial Replacements• Referral Business
Retention Rate (RR)
Take the number of customers from last year who are still
customers this year
(i.e. if you had 100 customers last year and 45 are still
doing business with you this year, then your retention rate
would be 45%).
Do you know your RR?
Reasons Roofers Don’t Build a System
• Time• Budget• Knowledge• Systems• Technology• Expertise• Management
Without the above Contractors don’t even know where to start.
Find out more…
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