I’m into my second week running an online business. I want it to run for the long-term so the one metric I’m paying attention to and remembering is LTV (lifetime value).
Lifetime value is the amount a customer will pay your business over the entire time they remain your customer.
Your lifetime value to your local supermarket chain is $50,000. If they provide a good service and product for 50-years, that’s how much they’ll profit.
If a supermarket clerk is rude to you one day and you never shop at that supermarket ever again, they just lost $50,000.
The same goes for any other kind of business.
You want to attract the right customers and keep the right customers. A $1000 client once is only a $1000 client. A $1000 client per year over 10-years is a $10,000 client.
Get cashflow in the short-term by providing a great product or service and keep it flowing by continually iterating and delivering.
See you next week!
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