Client Lifetime Value: Identify the True Value of Clients, Segments, and Markets
$229 Member | $329 Non-Member
Credit
PDH Credits:1.5
Description
Available on 4/16
Client Lifetime Value (CLV) calculations form a critical part of understanding how to invest and where to invest in your growth and business development efforts. Too often, firms look at short-term indicators to quantify how valuable a client is (such as trailing 12-month profit generated). Sophisticated firms are building more accurate models of client value that factor in the total expected profit a client will generate throughout the duration of their relationship with your firm. In this session, we will present several case study of how firms analyzed the CLV of their clients factoring in profit, retention, project size, segmentation, and client sentiment data. In all, over 500 clients representing $1.5 billion in annual revenue were analyzed. One firm identified a strategy to generate $138K in future profit for each ‘unhappy’ client converted to a ‘happy’ client. Another quantified an approach to increase profit by 1.8% of net service revenue. A third found their most profitable clients were twice as likely to cease doing business with them. A fourth discovered they created zero lifetime value on mid-sized projects. You will learn how to gather these metrics yourself and perform this analysis for your firm. An Excel calculator will be provided. Equipped with these new insights, we will discuss how to put these insights into action in order to improve client retention, drive margins up, and focus your business development efforts on the most profitable segments of your business.
TAKEAWAYS
Client Lifetime Value (CLV) calculations form a critical part of understanding how to invest and where to invest in your growth and business development efforts. Too often, firms look at short-term indicators to quantify how valuable a client is (such as trailing 12-month profit generated). Sophisticated firms are building more accurate models of client value that factor in the total expected profit a client will generate throughout the duration of their relationship with your firm. In this session, we will present several case study of how firms analyzed the CLV of their clients factoring in profit, retention, project size, segmentation, and client sentiment data. In all, over 500 clients representing $1.5 billion in annual revenue were analyzed. One firm identified a strategy to generate $138K in future profit for each ‘unhappy’ client converted to a ‘happy’ client. Another quantified an approach to increase profit by 1.8% of net service revenue. A third found their most profitable clients were twice as likely to cease doing business with them. A fourth discovered they created zero lifetime value on mid-sized projects. You will learn how to gather these metrics yourself and perform this analysis for your firm. An Excel calculator will be provided. Equipped with these new insights, we will discuss how to put these insights into action in order to improve client retention, drive margins up, and focus your business development efforts on the most profitable segments of your business.
TAKEAWAYS
- Apply the Client Lifetime Value (CLV) formula to better understand which clients are most valuable
- Identify both conventional and innovative ways to segment a client base to gain insight
- Demonstrate to leadership the financial role client loyalty plays in determining the value of a client
Presenter: Ryan Suydam, Client Savy