I write about how Local Service Business owners can build an engaging Utopian World for their customers to inhabit using Endless-Value-Journeys, a strategy that emphasizes delighting dream customers, fostering deep connections and cultivating lifelong relationships. This paradigm shift moves us from reacting to one-off transactional customers to inviting them into our world where our focus is on Lifetime Customer Value. Welcome to the art of building a Purpose Driven Expert business.

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Part 3: A Lifetime of Value

Let's have a recap of where we are...

  1. We understand that an internet presence is key based on the data of how people seek out local help and services.
  2. We understand that in order to succeed in today's digital world, we need to know the full picture and not just the tactics people are trying to sell us.
  3. We understand that we can't be 'all things to all people', and it's only when we focus on our dream customers that our business will be fulfilling.

Let's continue by me giving you the next concept, going from being 'Transactional Value focused' to 'Lifetime Value focused'.

Let me explain...

Probably the biggest transformation my clients make when they follow my process for building their own world is when they stop looking at every job in isolation.

For example, let's use our favourite plumber again as an example, and today he gets 3 calls from prospects who have a problem in their house. After speaking to each one for a few minutes to understand their problem, he identifies that each job will net him the following profits...

Prospect 1: $40
Prospect 2: $100
Prospect 3: $400

He already has work booked out for the next 3 days, so he schedules the 3 jobs out in the following manner...

Day 4: Job 3 (a.m.) with $400 profit. (6-8 hours)
Day 5: Job 2 (a.m.) with $100 profit (2 hours) , Job 1 (p.m.) with $40 profit (1 hour).

Then in 2 days time he gets another call from Prospect 4 with a job that he estimates is a $350 profit job that will take 5-6 hours...

And instead of booking it in on day 6, he calls prospect 1 up and tells him the bad news that he's got to put his job back, he gives an excuse that he's had a job over-run or something of that nature...

This happens again 2 days later when he receives a new call from prospect 5 with a job that he estimates has a $200 profit, and prospect 1 gets another 'sorry I can't make it' call.

This is the definition of 'Transactional Value' focus where the highest profit jobs get priority and the lower profit jobs keep getting shunted down the pecking order.

You might think this couldn't possible happen...

Yet, this happened to me when I was trying to get a carpenter to hang 2 new internal doors for me, a job that would have cost me approx £300 (UK), I expect the doors would have cost approx £100 each and would've taken about 1-2 hour's labor to complete.

So after other expenses like fuel etc he may have had £80 profit...

Each time the carpenter would book me in with about a 2 week lead time, only for me to receive a call 2 days before the job was about to start with some lame excuse of how his current job is over-running, or something of that nature.

After this same scenario with several carpenters, it took us 8 months to finally get the job done, which should have took 2 weeks...

Classic case of 'Transactional Value' thinking, without ever using 2nd order thinking.

In a later part of this manifesto, I'll get into how only a tiny percentage of your customers are in a position right now to buy your service, the remainder may be ready in the next 90 days to 18 months...

You see, each of these carpenters were optimizing for short term efficiency, but at the detriment of long term profitabilty...

Now if any of them would have took the time to put a 'Lifetime Value' system in place, they would have learned that I am a property investor, and have a portfolio of houses and apartments, all of which have multiple doors, and other carpentry work that needs doing from time to time. 

We've had to have full kitchens installed from time to time...

So, if they'd have thought Lifetime Value (LTV), they'd have seen that although the first transaction might have only been £80 profit on the 'front end', it could have been worth tens of thousands on the 'back end'...

I could have been one of their 1000 True Fans...

So how do you put a lifetime value system in place?

There are several steps, but you start by creating your Service Matrix, which is a framework I developed once I understood LTV and the 1000 True Fans concept.

Let me lay it out for you...

You start by listing every service you currently do, and every service you could potentially do... (don't worry about the how you're going to carry out the new jobs just yet, remember, this is your world you are creating, you're allowed to dream).

Then you put them into a matrix with the potential value categories of each service, like the image below on a piece of paper, later you can do a better job in an excel spreadsheet or google sheet.

Just list as many as you can, and create more columns with higher values if your business has higher price points, this is your world remember...

Once you have them listed like above, you can then organize them better where each price point are listed together...

When I first ask my clients to do this exercise, the response I get the most is "I didn't realise just how many things I do and can offer"...

I'm sure it will be the same for you...

Then you can begin to see your 'Front End' and your 'Back End' and how both are essential to a sustainable business.

Transactional Value focus is short sighted and not a viable option to building an asset, you just have a high paid self employed job.

Lifetime Value focus creates pathways to opportunities that you didn't see before...

It allows you to create systems and to build an asset that others would be willing to buy when you decide to retire or exit.

When you take all the jobs that you do out of your head and put them on to a piece of paper, and then you organize them into a Service matrix, all of sudden you start to see the endless possibilities...

You begin to see each prospect or customer as not just the value of their first enquiry (Transactional Value), but the limitless value you could offer over a lifetime (Lifetime Value)...

For example, did you know that during our lifetime, we generally move home 8 times on average?

Isn't that amazing?

So if you think you only do a job once in someone's home, you potentially get to do it 8 times.

Now it's worth pointing out that not everyone will buy every service you offer, but when your focus is on serving your dream customers at your highest level, some if not many will.

They will see how you can make their lives better, make their dreams come true by having the home or life they desire...

Are you starting to see how each of these concepts tie in together and how LTV is the key to having your new world be successful?

Start filling out your Service Matrix now...

And then when you're ready...

Continue to Part 4: Principles of a Purpose Driven Expert

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