It takes a lot of effort (and sometimes money) to attract and onboard new coaching clients. That is why many coaches choose to focus on selling more to the coaching clients they already have. This is called increasing the lifetime value of coaching clients, and it’s a great way to make more money with less marketing spend.
What is a Coaching Client’s Lifetime Value
The lifetime value of a customer is how much money they spend with your business over their customer lifetime. E-commerce businesses see lifetime value as an important metric, rightly so, but service-based businesses, especially coaches, tend to neglect this metric. It is not an easy one to track compared to other metrics.
In addition to reducing your marketing costs, knowing your customer lifetime value gives you the average value of each of your customers. This helps you to know how many coaching clients to onboard to hit your current and future financial goals. Each client you onboard is worth money immediately, but they are also worth money 2-5 years in the future.
How to Calculate a Coaching Client’s Lifetime Value
Calculating customer lifetime value and similar metrics are made a lot easier with a CRM. A CRM (customer relationship manager) is a system that stores customer information and keeps it up to date. It will contain information about past purchases for each coaching client. These CRMs can generate detailed reporting around profit per client. If you have a CRM, the best way to calculate the lifetime value of a coaching client is to run a report.
If you don’t have a CRM, you will have to manually run the numbers. It is not as easy to calculate the lifetime value of a coaching client (or any service client) as it is an e-commerce client. The best way to do it is to divide the total revenue for a period by the total number of customers for that period.
Customer lifetime value = total revenue/total customers.
This works best if the period is a few years. Not all of your coaching clients will return immediately; some will wait a few years before they return to work with you again.
Mindset Changes to Increase Customer Lifetime Value
Most people are delighted when clients want to work with them. It’s a clear sign that they enjoyed working with you and found value in the things they learned. However, service-based business owners, coaches in particular, often struggle to sell to current or “graduating” clients. The mindset is often that they’ve just spent a whole lot of money with you, and it would be greedy to ask for more.
This mindset is completely wrong.
Letting your coaching clients know that there are options available to continue their growth is a win-win. If you believe that you truly help your coaching clients (you should), then you should be excited to help them continue to grow. It’s not like you’re strong-arming them into signing up on the spot.
Modern consumers also expect the upsell. If you think about your shopping habits, no matter what you buy, there are always options to purchase related items, add-ons, or upgrades. Your coaching clients are expecting to hear about additional options towards the end of the coaching program. If you don’t provide it, they may think you didn’t enjoy working with them. And you don’t want that!
3 Ways to Increase a Coaching Client’s Lifetime Value
There is no limit to the number of ways you can increase the lifetime value of your coaching clients. You can experiment and find what works best for your coaching business.
Membership Group
A membership group is a great way to make consistent income from people seeking your expertise by creating a hub of resources. Every membership group is different, but to keep your coaching clients around, you need to add new resources each payment period.
It can also help to provide additional access to you as part of your membership group. Giving members input on what they want to see is a great start, not to mention it helps you with content ideas. Some coaches like to allow members to ask questions, and they answer the ones of their choosing.
Customer Journey
The best way to increase the lifetime value of your coaching clients is to offer products and courses that cater to different ability levels. Your coaching program may cater to an intermediate crowd. Let’s say you’re a leadership coach, and you help experienced managers who feel like they are constantly battling their team. A great way to do this is to create products and courses that cater to a beginner level and an advanced level.
The beginner level is a great way to hook potential clients with a low-ticket offer like a digital product or a masterclass. You help them to solve problems and introduce them to the value of your coaching. All while making money.
The advanced level is how you continue to nurture your current coaching clients as leaders. You could deal with difficult interpersonal issues or perhaps even learn how to turn their now cooperative team into a profit-making powerhouse. This could be done as a masterclass, additional coaching, or even a graduate membership group.
An added benefit is that once you start catering to the different aspects of your coaching clients’ journey, you’ll reach new clients. You’ll reach clients who are new managers who weren’t right for your intermediate coaching program. You’ll reach clients who are comfortable as leaders but wish their teams were more productive.
Masterclasses and Digital Products
A great way to increase the lifetime value of your coaching clients is to create products that solve a specific problem. Masterclasses and digital products can be created more easily than a full coaching program, and once created, they can be sold over and over. Who doesn’t love passive income?! Record your masterclasses; you can use the replay as a digital product, lead magnet, or resource in the future.