Judging a customer by the value of the last quote they accepted gives a partial picture of the relationship. Lifetime value — the total value a customer generates over time, not just in the last transaction — offers a more useful basis for deciding where to concentrate commercial effort.
Why one job is a poor yardstick
A customer who buys modestly but regularly can, cumulatively, be worth more than an occasional customer with a single large job. Looking only at the individual transaction undervalues steady relationships and overvalues isolated peaks.
What feeds into lifetime value
Order frequency, the average margin applied to that particular customer, and the acceptance rate on quotes put to them all combine to give a fuller picture of what a commercial relationship is really worth over time, beyond any single invoice.
How it changes commercial priorities
Knowing your customers' lifetime value helps you decide where to invest relationship time — follow-ups, personal attention, room to negotiate — concentrating it on customers who have shown over time that they generate recurring value, rather than spreading it evenly across everyone regardless of their history.