Now You Know Your Client's Lifetime Value, What's Next?
Tuesday, March 29, 2016 | Jeff Davis
If you read last week's post, you know why this number is magical.
If you are a YMCA employee, you know that this is the average lifetime value of a member based on a $53 per month membership fee and an average membership of 7.5 years. Thrive has a lifetime calculator posted on the Thrive website to help you determine your own lifetime value of a client.
So why is this number magical?
Because it helps you make better decisions. It helps you think long term.
It is easy to get caught up in short term thinking.
One example of short term thinking is "What does this cost?"
A long term view would be "What does this do for my business?"
We see this a lot in website development. The average business asks us "how much does a new website cost" (expense) rather than "how much revenue can a new website bring in". So hypothetically, if a website costs $10,000 they are thinking "I could never afford that... And the pool needs repairs... The parking lot needs resurfacing... The employees want raises." Websites are an expense.
At Thrive, we believe that a great website should be a revenue generator. If your website can bring in 10 new members per month at $53 per month, for 12 months (one year) that stay for the average lifetime of 7.5 years, the new revenue you experience over the lifetime of these new members is $572,400.
$572,400 versus a cost of $10,000.
The website still needs to be process friendly (showing programs, events, locations, etc.), but in today's business environment it must also be focused on generating revenue. This is especially important with businesses like YMCAs that rely on a subscription model for generating a large portion of their revenue.
We call this process The Membership Machine.
Realizing that few (if any) YMCAs actually sell memberships online, the website is an important source of sales leads. So in addition to supporting existing members with processes and information, they have to generate sales leads. This means capturing the contact information of the prospect (at a minimum name and email address) so the prospect can be entered into the sales process of the local YMCA.
Since new revenue is so important, Thrive has developed a large number of tools for encouraging site visitors to do so. Here are a few examples:
- The Silent Salesman. A custom widget that lives on the bottom right corner of the home page. It talks to the new site visitor teasing them with an offer of a 7 Day Trial Membership.
Once the visitor clicks on the salesman, it expands the offer as shown below. This is simply a sample of the offering. From within the back office the local Y can modify this message any way they like.
- Automated Drip Email. Once the visitor fills out the form, they are automatically enrolled into an automated email drip program. Immediately they receive a Thank You for Your Interest email with instructions on how to get their 7 Day Pass. Then you have the option of sending as many follow up emails as you wish, on a custom time line. Example - three days later they receive an email outlining the benefits of joining the Y. A week later an email covering your child care options. The next week an email on the latest Zumba class offerings... Fully customizable for your Y.
- The Scholarship Calculator. This tool allows potential members fill out an online form that includes General Information, Monthly Income Variables and the Additional Information necessary to calculate the possible savings available to the subscribing member prospect.
These are just a few of the tools we bake into our websites to help businesses engage potential sales leads. If you would like to hear more about how the Membership Machine works, give us a call - 419-776-7000 or click below to fill out the form and we will call you!