What the Fluff is.. Customer Lifetime Value, or Student Lifetime Value?

Yeah, sounds a bit dull, doesn't it? But it will make sense soon, I promise!

You've probably heard that '80% of your business comes from 20% of your customers'. In terms of education, schools working with agents in particular, you probably only receive students regularly from 20% of your agent network. You'll get others, sure, but most of your referrals come from your key partners. So it's worth looking after them, as I'm sure you do. They have a high 'lifetime value'.

Relating this to students, if they come for a summer program, great. If they then come again, maybe stay for longer or an academic year, and then again several times, they have a higher 'lifetime value'. Or if they enrol in, say, year 7 in a UK school, stay with you each year until year 11, and then hopefully for sixth form, they have a higher lifetime value than a pupil that leaves after year 11. 

Assuming they're paying, of course - as Daniel Cohen and Dominic Moon said in a chat the other day, we can fill beds with free or low fee students all day long, it's the ones that pay we need to recruit.

So back to it: What the fluff is Customer Lifetime Value (CLV). 

Think of it like this: Imagine you have a coffee shop, and there’s this customer who comes in every morning for their caffeine fix. CLV is basically how much that customer will spend in your shop not just today or tomorrow, but for as long as they keep coming back.

Now, here’s a neat little tip on how to work it out, in a really simple way. You just multiply the average sale value by the number of times the customer buys from you in a year, and then by the number of years they’re likely to remain your customer. So, if your morning coffee enthusiast spends $5 per day, and they come in around 250 days a year, and let's say they stick with you for 4 years, their CLV is 5 x 250 x 4, which equals $5,000. That’s a lot of lattes!

Okay, but what does this have to do with schools and educational agents? 

Well, we can tweak the concept a bit and call it ‘Student Lifetime Value’ (SLV). For schools, SLV means looking at how much a student will contribute financially during their entire time with you. This isn’t just about tuition fees; it includes everything from textbooks to dorm room decor.

Knowing the SLV can really help schools and agents make smarter decisions about everything from marketing to which programs to offer. It’s about seeing the bigger financial picture and building long-lasting, valuable relationships with students.

So, whether you're running a business or an educational institution, understanding and maximising CLV or SLV is like having a secret power. It helps you focus on the long game, ensuring your efforts today bring you value for years to come. Sell, retain, delight. And who doesn’t want that, right?

Hello, I'm Nicola Lutz and I'm a sales trainer, mentor and coach, specifically for the education sector. I help schools, counsellors and service providers gain more enrolments in an authentic, customer-led way with integrity. I have the credentials to back it up - I have 28 years of experience in study abroad of selling, sales management, sales directorship and training and coaching. I am a Fellow of the Institute of Sales Professionals and hold the Ethical Selling Certification.

If you'd like to talk to me about ethical selling in education - drop me a DM.