Lifetime value is a concept that is sparingly understood and seldom deployed effectively and, thus, profitably.
The recent public-listed companies reporting period highlighted the prevalence and quantum nature of lifetime value, especially where it is most conspicuous—the bottom line.
A decline in the rates of replacements and upgrades was nominated to be a significant contributing factor in the declines in profits and, therefore, dividends recorded by hearing implant manufacturers and mobile phone distributors. To a lesser extent, the downturn in new motor vehicle sales resulted from insufficient resources not being allocated to existing and past clients and customers.
It was a lesson learnt during the COVID-19 pandemic when people were restricted in their mobility and, therefore, exposed to the temptations of new purchases. The replacement market for electrical appliances, homewares, consumable kitchen items, and technology was relatively buoyant. That has since elapsed as normality returned to the economy, society, and marketplace.
Pursuing new customers and introducing inertia cold-canvas phone calls are apparent and understandable. Sadly, the results have typically been disappointing. A failure or decline rate of around 98% with cold calls is daunting for those making contact. Rejection is an emotional nightmare for many.
The scenario provides some insights and overviews on the disappointing sales performance of electric vehicles in the latter half of 2024. This is understandable, given that many prospective purchasers would have been first-time buyers.
Educating and informing current and past customers on the optimum period of use for specific products, services, and applications can be rewarding. Beds are an example. Most are designed, constructed, and intended for use over seven years or less.
That is a conversation in itself. It is an excellent catalyst for a timely narrative.
Please don’t sleep on it. Embrace the character, virtues and financial benefits of lifetime value.
Opportunity is calling.
Written by: Barry Urquhart
BIO:
Barry Urquhart is a distinguished market research and strategic planning consultant. He is widely respected as a keynote speaker at leading conferences across Australasia, and the acclaimed author of Serves You Right! And Service Please!, the region’s two best-selling books on customer service excellence.
A trusted voice in business strategy, Barry frequently leads impactful business development workshops, guiding organisations towards sustainable growth and service leadership.
Get in Touch with Barry: Email: urquhart@marketingfocus.net.au, Mobile:+61 041 983 5555.
