Life Time Value of customers underpins business success. A trained telephone answering service receptionist will increase that LTV, increase Average Order Value and increase your revenue.

Yes. It’s a simple answer to a question many businesses fail to ask. The Life Time Value of a customer is a vital part of making your business successful. In this article, we’ll point out the opportunities you can generate by using a telephone answering service.

  • What is Life Time Value (LTV)?
  • Why Life Time Value is important
  • Improve Your Customer Service
  • Why the Phone Wins for Business
  • The Upsell and the Cross Sale Bonus
  • Why Artificial Intelligence (AI) Fails

What is Life Time Value (LTV)?

Lifetime value, also known as Customer Life Time Value (CLTV) is a measure representing the total (net) profit a business can expect to create from a single customer throughout their entire relationship. This measure starts with the initial purchase of a product or service and any repeat purchases throughout that relationship.

How to Calculate:

Average purchase value, multiplied by average number of purchases

Once you have that number, what is the average lifespan of a customer buying from your business?

If a customer is buying services of a value of £1000 per year and the average length of the relationship is three years, then LTV is £3000.

This is a very rough guide. You can refine this more by calculating COGS, Cost of Goods Sold. That is your cost to make the product or produce the service.

Why Life Time Value is Important

Knowing the LTV of a customer informs strategic planning of your business and informs tactical decisions. For example, when you know the LTV and you look at your traffic sources you can understand whether that traffic source eg paid advertising is returning the investment (ROI).

Improve Your Customer Service

90% of customers in the USA (UK figures are hard to come by) say that customer service is the one factor they consider when choosing companies to do business with. **

Make your customer service exceptional, offer a personalised service and omnichannel support. The phone is the priority communication channel as it is the most personal.

Why the Phone Wins for Business

A survey by Salesforce* identified that 61% of customers prefer to speak to someone over the phone when they require assistance. In addition, 75% also believe that calling a business will lead to the quickest response time.

This is a recent survey and tells a story that differs from the hype around the use of Artificial Intelligence for customer communications. Are you the same? Talking to a real human being is still the dominating factor for customer care.

Retaining staff for phone answering can be costly while a telephone answering service is not. A reasonable monthly fee and call answer charge is also easy to analyse for Return on Investment (ROI).

Answering Every Call Value

We’ve established how important an answered call is to a business and we’ve also established your customer Life Time Value. What if you are not answering that call? What if a call goes to voice mail? What if the call goes to someone inexperienced?

You can estimate how much each missed call is costing your business.

Say for every ten missed calls in a week you lose two customers? That’s £6000 (using the above example).


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The Upsell and Cross-Selling Bonus

Trained phone operators offer two distinct bonuses. First, you maintain your customer’s loyalty and retain lifetime value and second (depending on the business), a) you have the opportunity to upsell the customer to a higher value product or service b) you have the opportunity for cross-selling to complementary products or services. This means you will be increasing Life Time Value by increasing Average Order Value.

Why Artificial Intelligence (AI) Fails

AI solutions can answer a higher volume of calls but is that an advantage? The frustration of dealing with bots can lead to poor customer experience very quickly. That will translate into the wrong type of word-of-mouth for your business. Yes. AI systems can be effective at handling simple queries, but they will struggle with complex queries that require a human touch. AI is not able to provide creative solutions, empathy with a caller or be able to make a judgement call.


When you know the LTV of a customer you will understand the value of answering every call and how much your business will lose if that call is not handled by a trained and empathetic operator.

Try our FREE trial or give us a call on 01582 540540 to find out how we will help.

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