Generally speaking, the higher your customers’ lifetime value, the greater your profitability - so I’m sure you’ll agree it’s worth looking into ways of increasing it.

Here are some of your options to consider:

1. Focus your recruitment strategy on your most profitable target audience

   Start by calculating the lifetime value of a typical client within each of your existing main customer segments. Then focus your recruitment strategy on targeting whichever segment profile has the highest lifetime value (as long as it’s cost effective to reach).
   
   

2. Create more Referral Champions

   Aside from introducing new business to your firm, one of the consequences of being a Referral Champion is that they become more loyal to your business (boosting their lifetime value as a result). This is because once they’ve wholeheartedly recommended you to others, they naturally feel more obliged to remain with you.

   Clients who are encouraged to give you a testimonial or Google Review are influenced in a similar way.
   
   

3. Seek to cross-sell and up-sell more

   Typically the more products a customer buys from you, the more connected they feel towards you as their broker. The additional bonus being that they tend to remain with you longer - which in turn increases in their lifetime value.
   
   

4. Increase your client retention rate

   Search online and you'll see a lot of research evidence that argues that a relatively small increase in your customer retention rate can lead to a significant rise in profits, with the increase in overall client lifetime value playing a major part in this.
   
   

Ultimately your objective must be to identify, nurture and retain your most valuable customers – and then recruit more people like them - and by doing so, you could have higher profit margins, increased customer lifetime values, and reduced customer acquisition costs.

And if you do the math you’ll see that a client who spends just £240 with you, who remains a customer for five years and refers a similar spending customer to you once a year, is worth more than £6,000 to your business.