{"id":12891,"date":"2017-01-30T04:00:01","date_gmt":"2017-01-30T10:00:01","guid":{"rendered":"https:\/\/www.rocksdigital.com\/?p=12891"},"modified":"2025-06-13T13:49:01","modified_gmt":"2025-06-13T18:49:01","slug":"customers-base","status":"publish","type":"post","link":"https:\/\/www.rocksdigital.com\/customers-base\/","title":{"rendered":"It\u2019s All About That Base \u2026 The Customer Base"},"content":{"rendered":"
\"Base<\/a>
Image Credit \u2013 Constantin Stanciu\/shutterstock.com<\/figcaption><\/figure>\n

No, I\u2019m not referring to Meghan Trainor\u2019s hit song by the same name, I\u2019m talking about your installed base of customers<\/a>.<\/p>\n

Baseline Customers are Critical to the Growth and Longevity of Your Business<\/h2>\n

When you look at the financial profile of the majority of small businesses, a limited number of customers often dominate the profits achieved. This principle is called Pareto\u2019s Law. In a typical small business, 20% \u2013 25% of the customer base can account for 75% \u2013 80% of the revenues and profits. Given this fact, where should you invest your time, energy and resources to grow your business in 2017? Here are some more hints \u2026<\/strong><\/p>\n

New Customers are More Expensive to Acquire<\/h3>\n

What we also know is that it\u2019s 6\u20137 times more expensive to acquire new customers<\/a> than to\u00a0retain existing ones and 2\/3 of the customers who leave do so because they feel neglected. Likewise, a 5% improvement in the customer retention rate could yield a 25% to 50% increase in profits\u00a0or more. So, it just makes good business sense to protect and grow those profitable business relationships in order to increase the lifetime value of each customer. Right?<\/p>\n

What is the Lifetime Value (LTV) of a Customer?<\/span><\/p>\n

The Lifetime Value of a Customer is the Average Purchase Amount x Frequency of Purchase x Average Length of the Customer Relationship.<\/p>\n

The chart below provides an example of the importance of not only retaining\u00a0but building upon those profitable client relationships<\/a>.<\/p>\n

\"Customers<\/div>\n

As you see reflected in this example, just a 10% improvement in the average purchase amount, the frequency of purchases and length of the relationship yields a 34.4% change in the LTV of the customer. Likewise, a 30% improvement in the categories would yield a staggering 141.4% positive change in the lifetime value of an individual customer.<\/p>\n

Move Customers and Sales from Transactional to Relational<\/span><\/p>\n

From the example, it\u2019s easy to see in pure financial terms the value of staying in touch with your existing customers and continuing to build upon those profitable relationships over time. It also points out the necessity of moving away from a transactional<\/u> to a relational<\/u> sales<\/a> and support model. Why? Because customers are people too, not transactions, and we\u2019re all in the human-to-human (H2H) business. Also, it\u2019s time-consuming and expensive to make up the revenue and profits associated with a customer loss.<\/p>\n

So, if you want to make this your most profitable year so far, then invest more time, energy and resources nurturing those established client relationships\u00a0while protecting and growing the base. You\u2019ll come out ahead in the end\u00a0because it\u2019s all about that base!<\/p>\n

<\/div>\n
\n
Why You Should Invest More in Your Base #Customers by @TresCoach #RocksDigital<\/a><\/div>\n

Click To Tweet<\/a><\/p>\n

<\/div>\n<\/div>\n

How are you nurturing your customer base? Share your ideas with us!<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

No, I\u2019m not referring to Meghan Trainor\u2019s hit song by the same name, I\u2019m talking about your installed base of customers. Baseline Customers are Critical to the Growth and Longevity of Your Business When you look at the financial profile of the majority of small businesses, a limited number of customers often dominate the profits […]<\/p>\n","protected":false},"author":27,"featured_media":25260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[68],"tags":[324],"class_list":["post-12891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-development","tag-sales"],"yoast_head":"\nIt\u2019s All About That Base \u2026 The Customer Base | Rocks Digital<\/title>\n<meta name=\"description\" content=\"Maximize your business growth by nurturing your customer base. 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