I woke up. Had breakfast. And, went right to work on the first Misfire supplement: Customer Care. A ‘new and revised’ edition of Total Customer Relationship Management.
Working on the revision has become something I look forward to. Something I really enjoy!
I am amazed at how well the material has held up. How timely and appropriate it has remained, especially now in a post-COVID-19 world. The two things that really jumped out at me were the lifetime value of a client and something called the Value Equation.
The Value Equation is just that. It describes the relationship that exists between Value, Cost, and Performance. The fact that if you change something one side of the equal sign it must be reflected on the other. If Cost goes up, but Performance (Service) remains the same, the Value perceived has no choice but to drop. If the Cost stays the same, but the Performance increased, perceived Value increases with it.
I believe now this is something we must all be aware of, whether as a provider of service or as a consumer.
It is just as important for you to recognize the Lifetime Value you present to a business as a loyal and lifetime customer as it is for them to understand that value. In Customers for Life, published in 1988, Carl Sewell, the second-largest Cadillac dealer in the Western United States at the time, calculated that value at $332,000. Three-hundred thousand dollars in new car sales and referrals and thirty-two thousand dollars in service and service referrals. That translates to just under $740,000 in today’s dollars!
The Value Equation and Lifetime Value are two things that should not be taken for granted. Not by consumers and certainly not by service providers!costloyal and lifetime clientsloyaltyperformancethe value equationvalue