Act 47

Never discount your lifetime value as a customer

If you’re considering a change in service provider, from your cable, to your cell phone to your financial institution, remember that what you have most to offer isn’t how much you’ve spent so far but how much you’ll spend over time. Your lifetime value as a customer (or LTV) can be leveraged when asking for a better deal or a better rate.

If you switch your cell phone from Rogers to Bell or your cable from Shaw to Telus, you can leverage your lifetime value as a customer. Firms know what you’re worth to them over time. And new providers know what they’re prepared to spend to acquire your custom (hence the free upgrades and equipment). It’s a calculated risk. That’s their cost of acquisition for your lifetime value as a customer.

Take pizza for example. It’s said that the LTV of a pizza customer is $8,000 so if you’re pie isn’t perfect, a good pizza joint knows to make good because it’s not about the $20 transaction, it’s about your $8,000 value to them.

If it’s that important to corporations, then it needs to be important to you. When negotiating any change or anything new, make sure you know your own lifetime value and leverage it for all it’s worth.