Customer Lifetime Value

July 9, 2018

Customer Lifetime Value

In a purely practical sense many people often forget about the relationship between up front project fees and then ongoing support fees.

When I first set up a design agency 10+ years ago we were told to focus on 5 figure and up projects.

During one specific week we launched a £10k project with £50/mth support fee and several smaller £1k projects with the same value support.

I realised if we launched 1 x £10k project over 3 years it would generate £11,800 total revenue.

However, and this is the real kicker:

If we launched 10 x £1k projects they would generate £28,000 total revenue over 3 years for not a huge amount more work.

So, we focused on smaller projects...and for the larger projects charged fixed percentage of the site build fees as support fees, roughly 5%.

It totally changed our business.

JFDI people!

Warm regards

Robin Waite

The Fearless Business Coach

Website - http://robinwaite.com
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