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Contractormag 13616 Customerlifetimevalue2

Are You Missing Out on This Customer?

Oct. 23, 2019
Change your thinking and start helping your customers more often.

Many Contractors race from one customer to another and scrounge every available marketing channel to get more leads.

On the one hand, it makes sense to do that; after all, customers equal revenue, so more customers equal more revenue. But on the other hand, that’s a lot of work and expense. Every customer that you’re serving right now represents a significant investment of time, money, and effort.

Fortunately, there is one type of customer that is vastly more profitable, yet often overlooked, and when you serve THIS customer, it can change the game in surprising ways.

I’m talking about a lifetime customer.

Most Contractors serve a customer once and then completely ignore them afterward. (Sure, maybe all customers go on a Christmas card list, or get a call when things slow down; but most customers are ignored after the first service is sold and performed.) Most Contractors serve a customer once, but most customers need service more than once.

Change your thinking and start helping your customers more often. Start thinking of your customers as having LIFETIME VALUE.

Know Their Lifetime Value

The lifetime value of a customer is the amount that they’ll buy from you over their lifetime as a customer. Instead of buying one service for a thousand dollars one time, customers over their lifetime could potentially buy tens of thousands of dollars from you, depending on what you sell.

Your first job is to know this number. In the early days of using this approach, it’s just guesswork. Over time, you’ll replace your guess with an accurate number.

For now, just make an educated guess:

  1. Figure out how much do you sell on average to a single customer for a single service
  2. Figure out often a customer could buy from you (for example, if you sell water heaters and customers replace them every 10 years, then an adult may theoretically buy about 4-6 water heaters from you in their lifetime).

That’s the starting point. Of course, there are other factors, including multiple services or the fact that people may move from one house to another and no longer buy from you after they move. Even the number of referrals that a customer makes will increase their value to you.

Your One Job

Once you have the Lifetime Value of your customer, then you have only one job: increase the average lifetime value of your customers.

You have one job: find and get more lifetime value.

Of course you shouldn’t stop marketing to new customers but with this approach you can actually divert some of your new-customer marketing to existing customers and actually see an increase in how much money you make (and profit you keep) because these are customers who already buy from you.

Ways to Increase Lifetime Value

There are many ways that you can find and keep a lifetime value customer:

  • Offer more services
  • Offer services more often
  • Figure out ways to keep customers even when they move
  • Help your customers make more referrals

I’m going to help you out even further with three very practical ways to increase the lifetime value of a customer:

#1. Sell Memberships. Memberships not only give you more cashflow, they also lock customers in for longer and help keep customers attached to you even if those customers move to a different home.

#2. Sell More Every Time. When a customer buys one thing, sell them something else. Start by making a list of everything you sell and then matching it with one other product or service. Then, when a customer asks to buy one thing, match it up with the other product or service and offer it as a package.

#3. Improve Your Marketing to Existing Customers. Most only think of marketing to get new customers but you should invest some of your marketing capital to stay in front of existing customers. This marketing is far cheaper and creates more sales (and more profitable sales) easily… yet very few do it.

Of course, there’s more you can do, but this is a great start.

The Benefits

When you add it up, the benefits of this simple approach are clear:

  • More effective marketing
  • More sales (and simpler selling) to people who already like you
  • More revenue… and more profit (since repeat customers are a more profitable customer-type)
  • Clearer marketing decisions (just grab your list of customers and go back to them)
  • Simpler decision-making for you—look it can be confusing to run a business but if you know your ONE JOB then that makes it easier.


Most Contractors are serving customers once and then going out to find new customers. But the smarter and more profitable approach is to think of customers beyond a single transaction—think of them as lifetime value customers. Make a simple change in your approach and start RE-marketing to existing customers and sell more to them over their lifetime. Provide lifetime value to your customers and they’ll provide lifetime value to you.

Mike Agugliaro is a Business Warrior on a mission to change the lives and businesses of service business owners. Mike and his business partner started and grew a struggling home service company into a multi-million-dollar empire before selling the company in 2017. Today Mike is an author, speaker, and mentor; and he's the co-founder of CEO Warrior, a high level coaching and training organization for home service businesses. Learn more about Mike and CEO Warrior at

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