Just Williams


Posted August 10th, 2023   By JWAdmin

Who doesn’t love an acronym?!

Well dare I tell you; the world of sales is no different – we too like the odd acronym. Perhaps, not in the volume some other sectors do but well, we just don’t like to feel left out.

So here is a new one for you. One we’ve been talking about a lot of late. A methodology we’ve been honing with our clients and running training sessions over the last six months.

CLV = Customer Lifetime Value

CPAM = Cost per Acquisition and Maintenance

ROI = Return on Investment

You’d be forgiven for not coming across the phrase Customer lifetime Value before and perhaps Cost per Acquisition and Maintenance, but Return on Investment should be a staple. So, let’s explore these in detail and look at why they are so vital to your business and why in my opinion, all and every person in every business should understand and know these numbers.

Customer Lifetime Value (CLV) is not a new concept, but one we have become more and more aware of. Distasteful, absolutely not – the value of your customers over the lifetime they remain a customer is an essential element to understanding your retention and customer acquisition strategy – ultimately fundamental to your overall business strategy.

Your CLV is the value (financial and otherwise) your customer represents over the term they remain a customer – so based on either their average spend over the term, or your ideal spend and term per annum i.e., 30K per annum x 3.4 Years = Customer Lifetime Value. You will have your actual versus your ideal.  It is this metric I recommend embedding into your annual Key Performance Indicators both company-wide and on an individual basis.

Imagine the difference it would make to your bottom line if you increased your Customer Lifetime Value by 10%. Often when we look to grow our businesses, portfolios and product lines, we focus on new business growth, new customer, new opportunities, new markets, new geographies. We forget our existing customers, we get complacent and, in a market, where very few of us are the sole provider of our service of product, i.e., we have competitors – what is our differentiator when it comes to retaining our customers? We have to add value at every turn; our differentiators cannot be price, people or market position or even a product as all of these elements can be replicated. We have to go above and beyond and give reasons for our customers to remain loyal. It is far more cost effective to retain customers than to acquire new ones, up to 125% more so (HubSpot, 2022). The Cost per Acquisition and Maintenance (CPAM) of your customers is another important metric to consider when establishing Return on Investment. What elements go into acquiring new customers? From marketing campaigns, sales campaigns, time, events, networking costs (ask NetKno about this) Platform costs, membership organisations, publications – the list can be endless. Not only the cost of acquiring but also maintaining and account managing. But have you ever sat down and worked out how much it actually costs to acquire a customer and then retain one? Few of us have and I can pretty much guarantee once you have, you will place more focus on your retention strategy!

Return on Investment (ROI) – an acronym you really have no excuse to not know. What return do you have to make on your investment to break even? In sales we can look for anything from a 2.5x ROI – 100x dependent on your market, manager or product / service.

Understanding your sales cycle and pipeline are a critical aspect to all the above and the timeframes involved. We’ve been running workshops, training days and mentoring sessions for the last eight years on how these elements can be embedded across a wide variety of markets – so if you would like some additional information on any of the topics, give my team a call.

Or if you, like us believe in Outsourcing and focusing on your core expertise, we have a range of sales and / or marketing solutions for you to help you grow your business profile, increase lead generation and are your ready-made Sales and Marketing team.

Find out how we can help you with your Sales and Marketing.

  • Consultancy
  • Mentoring
  • Roots – Sales and Marketing outsourced for small businesses
  • Going For Growth – Sales and Marketing outsourced for medium businesses.

We would love to chat to you. Contact me or any of my team to find out more.


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