Understanding the value of a customer…

Ariel G

June 26, 2014

Understanding the value of a customer…

Let’s say a customer walks in to buy a charger, which cost you $2 and you sell it for $10, your margin is $8.

How much will you make from this customer if you are successful in selling?   How much will you lose if this customer walks out without buying?The selling amount of $10?  The margin amount of $8?  What’s the value of this customer?

The fact is this customer’s value is a lot more than the $8 – $10 of the initial transaction.

An average customer relationship lasts about 2 years, resulting in average about 3 phone sales over that period ($40 x 3 = $120), activation commisson on average ($40) 10 accessories ($8 x 10=$80) topup replenishment (24 months x $5 margin = $120) which adds to $360.

Add to that the margin to be made from an average of 2 family and friend referrals from a satisfied customer.   ($360 + $360 = $720)

And now we have a whopping $1,080 of potential revenue to be made from one satisfied customer.

The customer that is standing in front of you is worth a lot more than the initial $10 they will spend today.   Treat them well and you will have them coming back for all their wireless needs!

And CellSmart POS will help you realize the customer’s value with our Lifetime Value calculator which automatically tells you how much money any particular customer has spent in your store to date.

Don’t just sell, CellSmart!

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