Your business, like a book, tells a story.

English was not my father’s first language. Like a lot of second language learners, he was an avid reader. He especially liked Conrad and Melville and read their bodies of work not once but several times during his life. As a young man, he would drop my mother off at her home after a date and often head for a neighborhood diner, book in hand, to read and drink coffee until the night waitress closed up and shooed him home.

Later in life, he added Louis L’Amour westerns to his list of favorites. One of the simple and great pleasures of his day was to settle into a comfortable chair in the evening to revisit a favorite read for a second or third time – or more.

Why did he prefer to re-read, rather than switch to something new? I asked him once. His answer, like him, was straightforward but not necessarily simple: It was a good book the last time, and he got something new from a book every time he read it.

Lately, it’s occurred to me that my father’s approach to re-reading favorites with new perspective is a surprisingly good business strategy, too. Get a new read on your business by reviewing your customer data.

Customer Acquisition // What does a new customer cost? Here’s a point of departure:

• Determine the sales and marketing costs you incurred, such as your website, sales promotions or marketing campaigns, plus your overhead for sales and marketing
• Divide this total by the number of customers acquired during a specific period of time.
• Consider the length of your sales cycle.

If your acquisition costs are high or your sales cycle is long, it’s time to rethink your strategy.

Customer Retention // “Loyalty” is a broad standard of customer value. Dig deeper to uncover the real story.

• Determine the length of time you expect customers to buy from your company, and divide the dollar amount you expect them to spend with you by that time period. That number is the average lifetime value, or LTV, of your customer base. Your profitability depends upon a balance of low customer acquisition costs and higher customer LTV.
• Identify the number of customers who meet or exceed that average LTV.
• Factor in the number of purchases they’ve made over that period of time, and the average dollar value of their purchases.

The numbers reveal which customers might be candidates for a reward, and which customers might respond to an incentive to increase their average purchase, or to buy more frequently.

If you typically evaluate your customer value by only one of these measures, it might be time for a re-read. And like my father reading in the neighborhood diner, that change in perspective can turn the page to a wealth of new insights.