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Lifetime Value: 

The value of keeping your prospects close, but your clients closer


Chronicles of Experience:

Lifetime value of clients is not something people really consider too often.  How much does it cost to get a client?  The whole process to turn a prospect into a client may well be a costly one.  What do you really gain from this investment if you toss old clients to the side as if they were meant for one-time use only?


The Cost evaluation:

Let’s say, for example, that it costs you about R1 500 to sign a client for a contract worth R2 500.  That means that the client is worth about R1 000.  Then you have the choice of tossing this satisfied customer away and seeing the R1 500 as a necessary expense or you can deem it an investment and keep hold of that client, investing some more time and energy into keeping them (let’s give that a number of about R500).  If this Lifetime client buys again this investment has paid off and this process can be repeated for even more potential profits.

In short:

New client value

Lifetime Client value

Client value:  How to choose lifetime clients:

As you can see in the equations above, you only gain the benefits if the client buys again.  So which clients are worth the extra time and effort?  To answer this question you must subject your clients to the following criteria to determine who can really be valuable as a Lifetime Client.

  • Need: Is this client a good fit with real need for your product or service?
  • Payments: Does this client pay reliably, on time and in full?
  • Relationship: Is there a good relationship between you and the client? How do they treat you and your staff?
  • Profits: How do the profit margins of the deals with this client look? Is it worth the effort?
  • Influence: How many new customers can a relationship with this client generate? Are they respected in the industry and will others look to them (and thus to you) as an example of how to do things right?

One of Tracer’s best lifetime clients is Siemens, who fulfil all the above criteria, and are of great value.


Salespeople should constantly be on the lookout for possible high-value lifetime clients.  There is a lot more I could say on this subject so comment below if you want another post on this subject.


  1. Koos says:

    This makes sense and I can see how it is more profitable to keep a customer but how do I keep a customer? I tend to lose them after a few months.

  2. @Koos. There are a couple of tricks and strategies I have developed over the years, look out for a follow-up post on this subject on the 7th of June.

    I post every Thursday and this week’s post will deal with the difficulties of Office Admin when your staff work from home, as is becoming increasingly common.

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