The calculator is meant to illustrate how valuable existing clients are, in contrast to the cost of attracting new clients.
The CLV calculator has six fields that an adviser fills in for one particular client, and the calculator produces the client’s lifetime value. It also helps advisers compare that value to what it would take to attract a new client. Access to the tool is free by going to www.rfactorstudy.com.
“The long-term value of a customer didn’t matter much in the glory days of our economy because there were plenty of clients calling or walking through the door,” said Lydia Baird, director of business development for Robinson & Associates, in an announcement. “[Determining] how to keep clients coming back is a critical step toward going from hoping you will stay in business to knowing that you can grow your practice,” Baird notes.