What is Customer Lifetime Value?

By: Lateef Farooqui

Customer Lifetime Value

CLTV attempts to determine the economic value a customer brings over their “lifetime” with the business.

Single vs. Multiple Transactions

vs.

To understand CLTV you must recognize

that a customer represents more than

just a singular transaction.

Cost to Acquire

Cost to Serve

Cost to Retain

Cost to Upsell

Lifetime Value

Lifetime Value Cycle

“Rather it’s a relationship that is far more valuable than any one-time

exchange.”

Why does this matter to a Commercial Roofer?

By: Lateef Farooqui

Commercial Roofers Value

CLTV is important to Roofers that want to increase revenues, decrease costs, stabilize

income, predict revenues, and perhaps even sell their business.

“Secure the future profits of your business, by securing your past

and present clients”

Cost to Retain Customers

Typically it costs less than $15 per year to maintain a customer with no additional revenues.*

Customer roofs generally mature to next full-replacement within 10 years or a $150 total budget for next sale!

Service and Maintenance Agreement work can offset this cost and actually become a sustainable source of income

for your operations.

*Based on 1000 roofs (lifetime) and a $15,000 year budget for customer retention.

The Difference Between Roofers

Typical Successful

Typical Roofing Sale Cycle

Acquire

Deliver

Collect

Forget

New customer’s are the most expensive ones to acquire and service:

• Full Sales Commissions Costs• New Lead Generation Costs• Require Most Support

Successful Roofing Sale Cycle

Acquire

Deliver

Collect

Maintain

Service

Nurture

Existing customer’s are the least expensive ones to acquire and service:

• Partial or No Sales Commissions Lead Nurturing Costs are min.

• Require Less Support• Service Call Revenues• Maintenance Agreement Revenues• Partial Replacements• Referral Business

Retention Rate (RR)

Take the number of customers from last year who are still

customers this year

(i.e. if you had 100 customers last year and 45 are still

doing business with you this year, then your retention rate

would be 45%).

Do you know your RR?

Reasons Roofers Don’t Build a System

• Time• Budget• Knowledge• Systems• Technology• Expertise• Management

Without the above Contractors don’t even know where to start.

Find out more…

$

$

$$

$

$

lower costs for a complete solution by sharing with others like you across the nation

Full Service, Partial Cost