The LTV Ratio Which Has Nothing To Do With Mortgages
In the world of Mortgages LTV (loan to value) is a ratio that loved by banks and but as a business owner there is an LTV you should be obsessing over
Life Time Value Or Customer lifetime value Formula
(Average value of sale) x (Number of Transactions) x (Number of Months/Years Client is with you)
This formula is the lifeblood of sales and marketing campaign, and if you don't know how much you're going to make from a new client, then you have no idea how much you can spend to acquire new customers or leads.
Let's look at an accounting client example
Average value of sale is ￡75
They pay monthly, so the number of transactions is 12
They stay with the practice for 3 years
￡75 x12 x 3 = ￡2700
In this example, each new client is worth ￡2700
Having a deep understanding of your LTV takes the guesswork out of your marketing and lead generation.