Place a value on your current customer

How much is a customer worth? Do companies really place a value on their customers. I did not just say value. I said place value, as in assign, a monetary amount to their customers. Most don't because they are on a mission of conquering new customers. All those efforts that go into conquering new customers comes about by neglecting their current customers. It takes a lot more effort and money to get a new customer than to keep a current customer happy and buying again and again. So why is it that companies don't focus more on their current customers. They just don't place a value on them.

Lets look at car companies; not all of them just one specifically Marketing Excellence Car Company (MECC). MECC makes $5,000 in profits for every car sold. They sell 10,000 cars a year. That is $50,000,000 in total profits. My math is right?

Well who cares about this? As my other posting on customer equity states that is all in the past. What we are concerned about is the repeat buyer.

The average car buyer will repurchase every 6 years (estimate). The average car buyer buys their first brand new car at age 28. If that car buyer drives until the age of 64, they will have purchased on average of 6 cars for themselves, not to mention purchases for kids, spouse, grandchildren etc. So keeping that customer happy and a repeat buyer is worth $30,000 (6 cars over their driving life x $5,000). You see how that $30,000 compared to millions is not getting their attention.

If the recent customer was happy with their previous purchase, MECC's selling costs would be reduced. Lets say by $500. Said differently MECC's profit would increase by $500. Take the $500 and multiply it by the 10,000 cars sold this year and the result is $5 million. I think you get the idea. Keep your current customers happy because they are worth more to you in the future.