We’ve been talking about Lifetime Value of a client / customer over the past couple of weeks.  Let me tell you a true story about a client of mine.  We reviewed her efforts this morning in a coaching session.  She’s in “professional services” and in 2008 had 5 locations, today she has 2.  No, she didn’t close any.  She sold 3 marginally profitable locations.

In 2008 she did about $2.1 million in revenue and on the books lost about $75k.  We then put together a plan to not actively look for new clients but rather “mine” the former clients and current clients for return visits and upselling.  We also put together a plan to sell the 3 marginally profitable locations and monitor very closely the expenses throughout the year.  This required the installation of some systems and some marketing efforts on her part.

The 3 locations all sold in September of 2009.  This morning we looked at her 2009 P & L.  She did just off of $2.1 million in revenue.  On the books she is profitable to the tune of nearly $200k.  But, in 2009 she also paid off a business line of credit she had taken out before she and I began working together.

Yeah, I know.  This recession is the worst economy since the great depression.

What did this cost my client?  Oh, about $400 for a flat panel TV in her waiting room that she hooks up to her server that plays bios of the staff and advertises all of their services.  About $200 for a “K Cup” coffee machine for the waiting area and a small refrigerator to hold bottles of water for people waiting.  That and about 3 hours of training her staff in how to make phone calls to prior clients to see if they wanted to come back in.  Set a goal for the staff of booking 6 a week off 12 calls a day.  (Do I need to remind you of her investment in a Business Coach?)

Yeah, I know. $600 and having the staff doing something revenue productive when they aren’t busy is really novel.

Yeah, I know.  This recession is the worst economy since the great depression.

You know, some people aren’t believing that line anymore.