Auntie Kate The Resale Expert

What’s the worth of one customer to your business? It could well be in the thousands…or tens of thousands.

One of the most serious and costly mistakes companies make is failing to recognize the difference between the value of a customer today and the long-term value of that customer.

Many organizations, when faced with a difficult customer situation may succumb to the tendency to “just let this one go,” allowing the customer to leave rather than make an exception to a rigid policy to accommodate the particular situation.

Read the full article at Customer Service Magazine.

It’s always great to generate new customers, but it’s usually much less expensive to hold onto existing customers. Repeat business is always more profitable,” says Gail Goodman , CEO of Constant Contact. “What is clear is that you can drive repeat sales and customer referrals at a dramatically lower cost than you can generate new customers,” Goodman said. “That drives profitability.” Goodman notes that once a…business creates a happy customer, that customer becomes part of your promotion team as they are bound to spread the news.

Read the full article at Practical ECommerce.

…lifetime value is critical to understand because it lets you determine how much you can afford to spend to acquire new customers. If each customer is only worth $20, the money you can spend marketing to gain new customers is going to be next to nothing. But, if a typical customer buys from you repeatedly and spends more than $1000 you may find it profitable to spend $20 or more to acquire a new customers because you’ll the profit on future sales.

Read the full article at Business KnowHow.

It’s not just the buyers, of course, in our industry. It’s the suppliers as well, who may be worth even more than any given purchaser.

Think about the value of each consignor, seller, or donor to your shop. This client could be worth even more to your business. Sure, some are One-Shot Sallies… but others are more devoted and long-term resources of merchandise to your business.