Well you’re either back for part two or you’ve just clicked in to my site in search of some information on how to grow your pest control company. Either way I’m glad to have you. If you’re just dropping in though maybe click here, read part 1 and then this part will make much more sense. Since I know most of you are back from reading the 1st article and I’m sure did your due diligence on our little assignment let’s get that key in the lock and open up some growth!
What Did You Think Of?
No wrong answers here but just an interesting exercise. When I asked you “Would you give something of real value to attain a customer” what came to mind? Hopefully it was a number of things ranging from say a TV, dinner, free service, $5.00 bucks off or maybe just a Thank you card. Did you finally settle on one? Depending on what you charge probably influenced what you thought of right? For this example let’s just say your average annual pest contract is worth $300. Kind of hard to swallow giving a TV away at that price isn’t it? So what about stepping down to a dinner- that would be anywhere from $50 to $100. Still kind of high huh? Ok, maybe a $5.00 referral fee or maybe a free yard spray. With this question I’d be willing to bet that your answers pretty much fit within the framework of what you’ve determined an average customer is worth. I didn’t give you a price in part 1 but if you came to a conclusion similar in value to my referral fee or a yard spray that really only costs you a few bucks you definitely under estimate the lifetime value of your customer.
Let Me Change The Question Just A Bit.
“Would you give something of real value to attain a customer whose lifetime value you knew would exceed say $7,500 dollars?” Aha, now maybe you’d consider a gift card for a dinner wouldn’t you? Maybe even a nice 20 inch flat screen for their den to boot- Why? It is simply because you have considered the lifetime value of the customer and planned to maximize that clients potential to achieve it. So if gifts or rewards are a part of your strategy then something of this value is in your mind worth it. (but I bet you’re still thinking one dimensionally- just a hunch)
At $300 Bucks That Would Take Years
You’re right, more than 25 years so that hardly seems worth it -why then do I value the customer at $7,500? Well, she pays $300 but once per year or so you sell an extra service say a power spray at $125. She likes you so much she referred you to her boss and now that is a monthly gig at $75 so $900 total per year. Two co-workers at the same price as her so $600 there, plus one needed a $1250 termite job and 5 months later her boss asked you to include his 2 other branch locations ($1800) and their huge warehouse at $210 a month with a $500 dollar set up for rodents($2810 total)– Whew! Ready to load that TV? That’s $7,785.00 dollars not counting the years these accounts stay with you! Now that’s some lifetime value and THAT KIND OF VALUE IS IN EVERY SINGLE CLIENT YOU HAVE!
Whoops, I’m running out of room to finish this article-and just when we were just getting somewhere. Tell you what, if you haven’t printed out those questions yet why don’t you click back to part 1 and do that now? I’ve really got a few good things to share with you & I think if you just ponder the questions I put forth you’ll really be ready to receive. Besides, I’ve got two interesting stories that are happening right here in my town as we speak that illustrate perfectly the dismal failure and one with great success of getting right- The Lifetime Value of a Customer. See you in part 3.