Think "value", not "cost".

Don't know who invented it or coined the phrase but there is a thing called "Customer Lifetime Value" Basically boils down to how much is that customer going to be worth to you over the lifetime of your relationship 5,10 or 20 years. So lets say someone spends $100 once a month.
100x12=1200x5=6000 and so on. So if you keep that customer/client for 20 years you treat them well cos you know that you are looking at a $24,000 customer. Treat them real nice and they may refer friends and family to you who also could be worth $24,000 to you , before long you have a really good business. It's not hard just good business sense and most times just good manners.

 

I have a recent example of where just being nice to people and being yourself pays off.
There was a potential customer in WA who sold products similar to ours but from a different supplier. At first she wouldn't even give me an appointment when I rang but I was polite and would say "That's ok maybe next time. I'll give you call when I am next coming over". This went on for about 18 months till I finally got an appointment to see her, she didn't buy on that first visit. But the next visit over she did. Now we are the best of firends and when I ring for an appointment it's "What night are you going to be here? I'll cook you bring the wine." Her husband and I get on like a house on fire and I even help the kids with their homework. I really enjoy the home cooked meal and the chance to have some great conversation over dinner instead of takeaways in a motel room is a nobrainer. She is now one of our best customers over there.
Sometimes things just take time but you need to persevere and be nice

 

It's funny you say this. Hubby & I constantly marvel at some skating rink operators (bear with me here, skating being what we've been around all our lives).
Anyway.....some of them are great, and have their normal sessions where the general public come & skate. They charge a premium for this. Then they use their down time for the 'sport' of skating. Where people come & learn different skills. For this time, they charge a reduced rate. It works out that the average person that enjoys skating will go around once a month, and pay, say, $15, while someone skating for sport may go once, twice, three, four or more times a week and pay, say $5.

The lifetime value of most general session skaters is only a couple of years, whereas the lifetime value of someone involved in the sport can be many, many more.

Which of the two would you consider the most valuable customer? I would consider those that come for sport, whereas many skating rink operators don't want the 'sport' customers, even though they are there during the down times, and the rink operator usually doesn't even have to have staff present, as a Coach is usually put in charge of ensuring that everything is looked after.

Also, bear in mind the ancillary sales (of skates). The general skater may buy one or two pairs in their skating lifetime, whereas the sport skater will need much more, usually specialist gear (more $$) and parts....lots of parts.

 

Great thread and something close to my heart. I am spending far too much time now for future benefit. Its only going last a bit longer though in order to free up a hell of a lot of time. So worth it in the long run, but easy to lose focus from time to time.

My family has owned boats for as long as I can remember. They have always been expensive 'toys'. One major issue is my dads attitude to 'cost'. He flatly refuses to pay $100 for a service which he can (in theory) perform himself for about $50. Albiet it takes a day to do.

So he will spend an entire weekend servicing, maintaining or repairing the boat at a cost of about $200 for parts rather than spending $500 to get someone to do if for him.
The cost isn't $300. The real cost is an entire weekend wasted rather than enjoyed on the water. I would much rather pay the $500 and drop the boat to someone mid week, pick it up at the end of the week and enjoy a leasurely weekend rather than spend it repairing the boat.
The costs above can be extrapolated. Last year he decided to re-wire one of our boats completely. The boat has been out of use for 12+month (and counting) and cannot be used.
All to 'save' probably less than $2000.

Blacky

 

But does he do this just to save the money, or does he really do it because he wants to do it?

 

In part I think this is some of it. He gets to 'play' on the boat without the hassle of cleaning it afterwards. Its has also become 'what he does' on a weekend.

 

So, in that case, maybe it's not so bad if he gets enjoyment out of it.

 

Great for him - no good for me. I want to be on the boat while it is in the water (or preferably under the boat).

 

Under the boat????? Please explain.

 

Ah I think I got it....diving? It's just that I am a sailor and under the boat is never a good thing!!!!!

 

I guess you had to be there.

I've given you one extreme and isolated incident, with a guy who has been in once only in 6 years, and for a $10 transaction (I know the dollar amount isn't the point - but it's the entire context of his history, and demeanour towards me in the 2nd transaction) - he was never a "customer", never gunna be a customer.

See above.

 

Skater, I know you can't treat customers like that; please give me a bit of credit.

Without turning this into another "keeping the business afloat" thread, I'll just say that the decline in mechanical workshop business is widespread - as confirmed by all reps and salespeople who call in each week....

The factors are multiple; servicing, tyres, repairs, spare parts, equipment - all areas are down. Many have closed.

The economy is not good currently (despite what is reported) and vehicles are a grudge spend for most folks and pushed to last in a priority list of spending when their money is low.

Folks go 2, 3 and more years and 50+ thousand K's overdue for services - regularly - and even then only come in because the car has started to fail.

For eg; a lady came in on Fri to get a puncture repaired, and the tyre was down to the steel belts - and so were all the other tyres on her car ...and there was a toddler in the back seat. I aplogised that her tyre was not repairable because it was no longer roadworthy, and told her she needed 4 new tyres...I gave her a few prices, and she drove away "to have a think about it" She may come back. So, had she not got that puncture, she would be still driving around obvious to the condition of her tyres. Given that these sorts of things are normally reported when a car is serviced, I'd wager the car hasn't been serviced in a long time as well.

And It is a lot more common than you folks realise. Workshops are closing down all over our Country currently, and many are not able to be sold that are for sale.

FWIW; every week we get new customers coming in to our shop who have whinges about their previous workshops - for different reasons. It is unbelievably scary how easy it is to lose a customer and for such tiny issues (obviously not in the eyes of the customer, I know) - and I hear them every time a new customer comes in..they like to validate why they left the last place..I don't enter into the debate, just let them go with their story.

Things such as; "They forgot to stamp my service book!!"

Seriously?

So, I have no guilt about throwing a skanky bogan out of my shop who is trying to white-ant me over a $25 puncture, and is being an ******** about it into the bargain.

Had he have said; "Look; I'm flat broke and I need this fixed, can you do it for less?" I would have "Mate; I'll do it and you can fix me up whenever you can".

I do this all the time, but sadly; about 1/3rd of them never do come back.

Anyway, whatever; you guys have formed an opinion based on one extreme incident with an extreme version of a human, and that's fine with me.

Just because I might need the $25, doesn't mean I will fold over, grovel and cop being treated like a piece of ****** from a less-than-once-in-a-blue-moon blow in.

I could be like everyone else here who says nothing about themselves, yet jumps into everyone else.

I might start doing that; divulge nothing about myself or life to anyone (too late ), then I can pass myself off as good guy here, while I judge and "1000 yard snipe" everyone else.

 

Maybe all this scrimping is the only way he can afford to have the boat (which he probably can't really afford?)

Some folks also do all this because it is a hobby/interest.

But, I'm with you; I want to be ON the boat and not working on it.

 

Ok @Bayview get your point sorry didn't mean to jump to conclusions. Mea culpa Mea Culpa Mea Maxima Culpa. Cheers