What is lifetime value?Jun 27, 2022
How do you know the value of a new client in your firm? Are they known by the amount they’re paying at the moment? Or are they known by the amount they’d pay over time? You see, when it comes to determining the value of a client in your firm…You look at their Lifetime value.
And what does this mean?
The Lifetime value of a client is how much profit you're going to be earning from a client over the period that they’re going to be with you rather than just looking at profitability based on what you see on a timesheet at one point in time.
Forget Disney, Netflix and Gray’s. We accountants are the original subscription service. We are lucky (because of the nature of our services) to have clients stay with us for a long period of time. And so it would be wise of us to stop thinking about clients and the return they generate in the here and now… And start thinking about the lifetime value of a client. We need to move away from thinking profit per job and start thinking profit per portfolio.
How can you do this? Or more importantly, how can you use the concept of Lifetime value to your advantage?
In today’s video, I’ll show you where your focus should be, the exact figures you should look after, and how to make the lifetime value of your clients work in your favor. Watch the video below to find out more