October 20, 2014
SEO for Property Managers Part 2 - Calculating Lifetime Value of Customer
Before starting an SEO strategy, a property management company should figure out its “Lifetime Value of a Customer” or LVC. This number will help the company determine the ROI of any advertising campaign including organic search.
To compute the LVC use the following formula:
RPU = Revenue per Unit (Include ALL annual fee income including lease fees, inspection fees, renewal fees, application fees, etc. and divide by 12) Usually between $1500 and $4000.
AMM = Average Months Managed (This is the average length of time that an account remains a customer) Usually between 18 and 42 months.
APC = Accounts per customer (Number of units owned per customer)
MRA * AMM * APC = LVC The lifetime LVC calculation is the key to all of your advertising campaigns. Obtaining an ROI For each new customer acquisition strategy, LVC will help the company focus on the most effective campaigns and get the best use of limited advertising funds.