Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
All right, good morning everyone, Thank you all for joining
us and and we appreciate we appreciate your time and
taking time to be with us. Here, hold on, we
get this done, all right, So today we are going
to talk about you know, CLV or client lifetime value. Look,
(00:37):
by now, you know many of you should understand some
of the basics. You know, like what are you charging?
How much? How much are you charging your clients? You
know what what are you paying your caregivers? You should
have a basic understanding as to how you are you know,
(00:57):
billing your clients. By now, you know what what is
your gross margin? What is you know, you should have
a rough understanding of you know, how much your net
margin is? You know there there's a few numbers that
you should be aware of. And you know my question
to you is, and please feel free whether you're watching
(01:19):
this on Facebook or on YouTube, just leave a comment.
Blow do you know what your client is actually worth
to you? So? What do I mean? What is the
lifetime value of your client? Do you even know how
how to calculate this? You know? Where do we begin? Well?
(01:44):
The client lifetime value is how much money? When we're
talking about grossing net here? So how much money are
are you actually putting in your pocket by the time
you end services? All right? So what does this mean? Well,
this means that you know, when you are trying to
(02:08):
figure out when you're trying to figure out like how
long your client is, and you should be tracking all
of this now, all right, how long do you have
your how long does your client stay with you? Now,
if you're a newer agency, this is going to be
a little bit tougher to calculate, but you can use
(02:32):
the industry average of about one hundred and twenty days
or four months, so this is okay, all right, So
this is what it comes down to. All right. So
let's say you are charging, for example, twenty five dollars
per hour. Okay, So if we're charging twenty five bucks
(02:56):
an hour and our client is get an average of
let's say, twenty hours a week, which is, you know,
right in line with the industry average right now, so
you're looking at you know, twenty five twenty hours a
week for one hundred and twenty weeks. That's three hundred
(03:19):
and twenty billable hours, okay, at twenty five bucks an hour,
all right? At that, so that means you're billing eight
(03:42):
thousand hours, eight thousand dollars. Okay, over the course of
four months. So your gross is you know, well, your
your revenue for that client, your client value is eight
thousand dollars for that one client. So that's your client
lifetime value for an estimated twenty five dollars an hour,
(04:04):
twenty hours a week, you know, for one hundred and
twenty days. Okay, So if we are looking at which
is twelve weeks by the way, that's where I got
the number, and I'm sorry, that's ninety days. My apologies,
all right, So sixteen times is three hundred and eighty.
(04:26):
Now three hundred and twenty I was right, all right,
So that's eight thousand. So now if we're keeping a
respectable gross margin, which is about fifty percent, that means
your gross client lifetime value a gross profit is four thousand,
and then you have to calculate in what does it
(04:47):
cost you to actually staff that client, like your nurse visits,
What did those cost you, What did the you know,
if you're in a state that requires nurse visits, what
did it cost you for your coordinator staff, you know,
any other auxiliary services. And you bring it down and
that's how you're going to figure out your net you know,
when you calculate the taxes and everything else. You know,
(05:09):
which if you're doing private pay, your net should be
anywhere between, you know, on the low end, seventy eight percent,
on the higher end, you know, thirteen to fifteen percent.
And some agencies type seen have kept fantastic margins and
very low overhead that have gone up as high as
(05:30):
eighteen percent net profit. So this is what you're looking at.
So why is this number important? Well, you got to
know where where your money is going. So if I'm spending,
for example, you know, let's say two thousand dollars a month,
(05:52):
so that means over the course of every you know,
every quarter, I'll be spending six thousand dollars on digital
marketing and advertising. Okay, So if I'm spending six thousand
dollars and I and that six thousand dollars is going
to net me let's say five clients, well that's a
worthwhile investment, you know, because now let's say total revenue
(06:16):
I have on the average client, it's going to be
you know, about eight thousand dollars so for the lifetime.
So if I've gotten you know, you know, Let's say
over that that six thousand dollars investment, I got five clients.
That's forty thousand dollars net. So the ROI on that
is actually pretty good. But if I mean, it's not great,
(06:40):
but it's it's decent, you know, So forty thousand, you know,
you're looking at a twenty thousand dollar gross margin, So
that means you've netted with you know, not neted, but
you've come closer to a gross of you know, fourteen
thousand dollars after you calculate marketing costs. And that that's decent,
(07:00):
that's respectable, okay, But if I am spending the same
six thousand dollars on an advertising medium that doesn't generate
that only generates one client, well, one client is six thousand,
So now my gross is four thousand. That means I'm
operating on a loss of two thousand dollars. And this
is how you're going to be able to actually calculate
(07:24):
whether or not a marketing effort, you know, or a
marketing campaign is worth your while. So let me ask
you guys a question, and please leave a comment below.
You know, are you guys tracking these numbers? Do you
(07:50):
know what your average client lifetime value is do you
know what you know whether or not your campaigns are worthwhile?
Have you do you actually track the return on your
investment on your Facebook ads, your Google pay per click?
You know, your Google ads, your pay per click LinkedIn
(08:13):
whatever it is you're doing. You know these referral these
referral providers like aging Care Karen Holmes, you know a
place for mom. You know what is the return on
your investment? How much are you spending to advertise with
them or how much are you paying them for client?
And what is your average your average client lifetime value?
(08:40):
Let us know in the comments below. And you know,
once again, we are running a class that actually starts
this Tuesday, you know, July, I want to say twentieth,
you know, and Tuesday July twentieth, we're looking at starting
(09:08):
a class home Care one oh one. We have their
two different sessions. You have the business development one oh
one and the management one oh one, and we're going
to cover all these calculations and a whole lot more
great information. These are thirty day programs. They're three point
fifty each or six seventy five for the two. It's
a sale. I'm running this time around kind of like
(09:30):
we're moving out of COVID. Let's you know, let's get
our businesses back in line, and you know, you get
to keep all of these calculators and everything else that
we're going to provide at the end of the course.
So register today because the registration ends Monday night, you know,
Monday at midnight or Tuesday in the morning. Whenever I
(09:52):
get to the office, I'm closing it out and you're
going to have to wait until I do another course again.
But take advantage. The link is in the just description
on how to you know, how to sign up for
the class, and you know, thanks for joining us, and
we'll see you again on Monday morning. You guys, have
a great weekend.
All right, good morning everyone, Thank you all for joining
us and and we appreciate we appreciate your time and
taking time to be with us. Here, hold on, we
get this done, all right, So today we are going
to talk about you know, CLV or client lifetime value. Look,
(00:37):
by now, you know many of you should understand some
of the basics. You know, like what are you charging?
How much? How much are you charging your clients? You
know what what are you paying your caregivers? You should
have a basic understanding as to how you are you know,
(00:57):
billing your clients. By now, you know what what is
your gross margin? What is you know, you should have
a rough understanding of you know, how much your net
margin is? You know there there's a few numbers that
you should be aware of. And you know my question
to you is, and please feel free whether you're watching
(01:19):
this on Facebook or on YouTube, just leave a comment.
Blow do you know what your client is actually worth
to you? So? What do I mean? What is the
lifetime value of your client? Do you even know how
how to calculate this? You know? Where do we begin? Well?
(01:44):
The client lifetime value is how much money? When we're
talking about grossing net here? So how much money are
are you actually putting in your pocket by the time
you end services? All right? So what does this mean? Well,
this means that you know, when you are trying to
(02:08):
figure out when you're trying to figure out like how
long your client is, and you should be tracking all
of this now, all right, how long do you have
your how long does your client stay with you? Now,
if you're a newer agency, this is going to be
a little bit tougher to calculate, but you can use
(02:32):
the industry average of about one hundred and twenty days
or four months, so this is okay, all right, So
this is what it comes down to. All right. So
let's say you are charging, for example, twenty five dollars
per hour. Okay, So if we're charging twenty five bucks
(02:56):
an hour and our client is get an average of
let's say, twenty hours a week, which is, you know,
right in line with the industry average right now, so
you're looking at you know, twenty five twenty hours a
week for one hundred and twenty weeks. That's three hundred
(03:19):
and twenty billable hours, okay, at twenty five bucks an hour,
all right? At that, so that means you're billing eight
(03:42):
thousand hours, eight thousand dollars. Okay, over the course of
four months. So your gross is you know, well, your
your revenue for that client, your client value is eight
thousand dollars for that one client. So that's your client
lifetime value for an estimated twenty five dollars an hour,
(04:04):
twenty hours a week, you know, for one hundred and
twenty days. Okay, So if we are looking at which
is twelve weeks by the way, that's where I got
the number, and I'm sorry, that's ninety days. My apologies,
all right, So sixteen times is three hundred and eighty.
(04:26):
Now three hundred and twenty I was right, all right,
So that's eight thousand. So now if we're keeping a
respectable gross margin, which is about fifty percent, that means
your gross client lifetime value a gross profit is four thousand,
and then you have to calculate in what does it
(04:47):
cost you to actually staff that client, like your nurse visits,
What did those cost you, What did the you know,
if you're in a state that requires nurse visits, what
did it cost you for your coordinator staff, you know,
any other auxiliary services. And you bring it down and
that's how you're going to figure out your net you know,
when you calculate the taxes and everything else. You know,
(05:09):
which if you're doing private pay, your net should be
anywhere between, you know, on the low end, seventy eight percent,
on the higher end, you know, thirteen to fifteen percent.
And some agencies type seen have kept fantastic margins and
very low overhead that have gone up as high as
(05:30):
eighteen percent net profit. So this is what you're looking at.
So why is this number important? Well, you got to
know where where your money is going. So if I'm spending,
for example, you know, let's say two thousand dollars a month,
(05:52):
so that means over the course of every you know,
every quarter, I'll be spending six thousand dollars on digital
marketing and advertising. Okay, So if I'm spending six thousand
dollars and I and that six thousand dollars is going
to net me let's say five clients, well that's a
worthwhile investment, you know, because now let's say total revenue
(06:16):
I have on the average client, it's going to be
you know, about eight thousand dollars so for the lifetime.
So if I've gotten you know, you know, Let's say
over that that six thousand dollars investment, I got five clients.
That's forty thousand dollars net. So the ROI on that
is actually pretty good. But if I mean, it's not great,
(06:40):
but it's it's decent, you know, So forty thousand, you know,
you're looking at a twenty thousand dollar gross margin, So
that means you've netted with you know, not neted, but
you've come closer to a gross of you know, fourteen
thousand dollars after you calculate marketing costs. And that that's decent,
(07:00):
that's respectable, okay, But if I am spending the same
six thousand dollars on an advertising medium that doesn't generate
that only generates one client, well, one client is six thousand,
So now my gross is four thousand. That means I'm
operating on a loss of two thousand dollars. And this
is how you're going to be able to actually calculate
(07:24):
whether or not a marketing effort, you know, or a
marketing campaign is worth your while. So let me ask
you guys a question, and please leave a comment below.
You know, are you guys tracking these numbers? Do you
(07:50):
know what your average client lifetime value is do you
know what you know whether or not your campaigns are worthwhile?
Have you do you actually track the return on your
investment on your Facebook ads, your Google pay per click?
You know, your Google ads, your pay per click LinkedIn
(08:13):
whatever it is you're doing. You know these referral these
referral providers like aging Care Karen Holmes, you know a
place for mom. You know what is the return on
your investment? How much are you spending to advertise with
them or how much are you paying them for client?
And what is your average your average client lifetime value?
(08:40):
Let us know in the comments below. And you know,
once again, we are running a class that actually starts
this Tuesday, you know, July, I want to say twentieth,
you know, and Tuesday July twentieth, we're looking at starting
(09:08):
a class home Care one oh one. We have their
two different sessions. You have the business development one oh
one and the management one oh one, and we're going
to cover all these calculations and a whole lot more
great information. These are thirty day programs. They're three point
fifty each or six seventy five for the two. It's
a sale. I'm running this time around kind of like
(09:30):
we're moving out of COVID. Let's you know, let's get
our businesses back in line, and you know, you get
to keep all of these calculators and everything else that
we're going to provide at the end of the course.
So register today because the registration ends Monday night, you know,
Monday at midnight or Tuesday in the morning. Whenever I
(09:52):
get to the office, I'm closing it out and you're
going to have to wait until I do another course again.
But take advantage. The link is in the just description
on how to you know, how to sign up for
the class, and you know, thanks for joining us, and
we'll see you again on Monday morning. You guys, have
a great weekend.
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