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Digg It - Customer Lifetime Value - The Key To Maximizing Your Profits!
The greatest asset to your business is your Customer,
specifically, your Customer Lifetime Value.
In my many years in Sales and Marketing, I've met many CEOs and business owners who don't have much clue as
In my many years in Sales and Marketing, I've met many CEOs and business owners who don't have much clue as
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
to what Customer
Lifetime Value is, much less its importance and the impact it
has on their bottomline. To most of them, what matters most is
to increase revenue by continuously acquiring new one-shot
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
customers.
This is one of the fatal mistakes that many business owners make; it's a sad scenario, but it's also the reality. Let me tell you something: it'll cost you 5 times more to attract a new customer
This is one of the fatal mistakes that many business owners make; it's a sad scenario, but it's also the reality. Let me tell you something: it'll cost you 5 times more to attract a new customer
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
than it is to bring one of your past customers back to you.
I don't know you personally, but if you're a smart business owner, you'll understand that every cent you invest in advertising is going towards
I don't know you personally, but if you're a smart business owner, you'll understand that every cent you invest in advertising is going towards
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
acquiring new customers. You'll also realise that
once you've acquired the customers, you just can't afford to let
them go.
So what's Customer Lifetime Value?
Customer Lifetime Value is defined as
So what's Customer Lifetime Value?
Customer Lifetime Value is defined as
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
the total value, in
monetary terms, of your average customers spanning the entire
period that these customers are likely to do business with you.
It's the potential contribution of your customers to your
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
business over a period of time.
Here's how to calculate your Customer Lifetime Value:
1). Let's say you've 2,000 steady customers and these customers remain with you for an average of two years; for the p
Here's how to calculate your Customer Lifetime Value:
1). Let's say you've 2,000 steady customers and these customers remain with you for an average of two years; for the p
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ast two
years, your net profit was $700,000.
The Customer Lifetime Value can be calculated as: $700,000/2,000 = $350.
What this means is that over an average customer lifespan of two years, each new cus
The Customer Lifetime Value can be calculated as: $700,000/2,000 = $350.
What this means is that over an average customer lifespan of two years, each new cus
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
tomer you could acquire and keep is worth
$350 to you in profits.
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your
2). If you do not have the actual figures, you'll have to estimate. As the Customer Lifetime Value will have a significant impact on your
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
bottomline, my advice is that you be prudent and
conservative in your estimation.
Why is it so important to you and your business?
Lifetime Customer Value is important to you and your business for
Why is it so important to you and your business?
Lifetime Customer Value is important to you and your business for
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
the following reasons:
1). Knowing the Lifetime Value of your customers is crucial to you and your business as it serves as a benchmark without which you'll be groping in the dark.
When you know the Lifet
1). Knowing the Lifetime Value of your customers is crucial to you and your business as it serves as a benchmark without which you'll be groping in the dark.
When you know the Lifet
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ime Value of your customers, you can
determine how much time, effort and money you can afford to
invest to acquire that customer in the first instance.
In other words, you can invest more today to reap a m
In other words, you can invest more today to reap a m
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ch larger
profits later down the road as long as your cashflow is healthy
and can support it.
Every marketing campaign that you undertake costs you money as well as reaping you benefits such as increased
Every marketing campaign that you undertake costs you money as well as reaping you benefits such as increased
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
sales, enhanced
corporate image, etc. But how can you be sure that the benefits
would outweigh the costs or investments? This is where knowing
the Customer Lifetime Value is so powerful - it helps you to
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
determine this even before you launch your marketing campaign.
2). When you realize that customers are actually an ongoing stream of revenue as opposed to a one-shot sale, you can re-focus your marketin
2). When you realize that customers are actually an ongoing stream of revenue as opposed to a one-shot sale, you can re-focus your marketin
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
efforts.
Instead of contantly struggling to acquire more and more new customers, you can now begin to focus on keeping your existing customers longer and selling to them repeatedly, in other words, repe
Instead of contantly struggling to acquire more and more new customers, you can now begin to focus on keeping your existing customers longer and selling to them repeatedly, in other words, repe
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
at sales.
You may spend more like making stronger and more attractive offers than your competition in acquiring new customers now who will be your money spinners tomorrow.
This makes sense because you now
You may spend more like making stronger and more attractive offers than your competition in acquiring new customers now who will be your money spinners tomorrow.
This makes sense because you now
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
know that on average you'll more
than make it back over the years that the customers are with you
and therefore you could afford to break even or even lose money
now in acquiring the new customers.
Star
Star
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
shifting your focus to Customer Lifetime Value and maximise your profits today!
Start to have a proper understanding of Customer Lifetime Value because it's key to the success of your business. It'll allow
Start to have a proper understanding of Customer Lifetime Value because it's key to the success of your business. It'll allow
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
you to acquire more customers than your competition through
better and more attractive offers; it'll dramatically increase
your bottomline through more repeat sales and shoot your profits through the roof
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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