Money view
What is customer value for a local business?
Customer value is the total a customer is worth to your business over the time they keep booking, not only the first job. As an example, a customer who books 4 visits at $310 each over three years is worth $1,240, about four times the first job. It is the number that tells you how much a new customer is worth paying for.
How do you work out customer value?
Customer value = what they paid on each visit, added up. For a forward-looking figure, use average spend per visit x visits a year x years they typically stay. Example, labelled as an example: $310 a visit x 4 visits over three years = $1,240. Use your own average ticket & your own repeat rate; the example only shows the shape.
Why does the first job understate what a customer is worth?
Because most local businesses live on repeat work & referrals: the second oil change, the next cleaning, the annual service, the neighbour who was told. If you judge every ad or channel on the first sale, the channels that bring loyal customers look no better than the ones that bring one-time buyers. They are not the same.
What do you need to measure it?
One record per customer that joins their bookings & their payments across the tools you use. Most owners have this spread across a booking tool, a payment processor & a books file, each seeing a different slice. That is the job of Connect: read those tools & build one record, with the customer's source on it so Attribute can set value against cost.
What should you do with customer value?
Set it beside cost per booked job. If a channel wins customers at $75 each & those customers are worth $1,240, you can afford to spend more to win them than the first-job math allows. If a channel wins customers at $75 who never come back, you cannot. The ratio of value to cost is the figure to steer by, & it is what the Monday report shows.
Questions owners ask
What else do owners ask about customer value?
What is customer value for a local business?
Customer value is what one customer is worth to the business over the time they keep coming back, not only the first job. As an example, a customer who books 4 visits at $310 each over three years is worth $1,240, about four times the first job.
Is customer value the same as lifetime value?
Close. Lifetime value counts everything a customer is expected to spend over the whole relationship. Customer value, as Foreman uses it, is the same idea measured on what you have already booked & been paid, so it starts small & grows as the customer returns.
Should I use revenue or profit?
Revenue is easier to read straight from your booking & payment tools, & it is where to start. Profit is the better test when your margins differ a lot by job type. Pick one, label it, & use it the same way on every customer.
Where does the data come from?
From the tools you already run: booking, payments & books. Without them connected, each customer shows as a first job only, which is why a business that looks at a single sale tends to undervalue its best customers.
What do I do with the number?
Compare it with what the customer cost to get. A customer worth $1,240 that cost $75 to win is a different decision from one worth $310 that cost $75, & the second customer may still be worth buying, but the ad budget for each should not be the same.