Ask HN: How much are your clients worth?
3 comments
Lifetime spend of the client.
What about "number of clients referred" or "potential to generate new business"?
The amount learned is not something which I would use to evaluate clients - some of the most valuable lessons are learned the hard way from really bad clients. A more meaningful related concept is how does a particular client lead you to additional projects.
The element which is missing is cash flow - it is touched on by several of the other elements but given that your business will fold if it runs out of cash it is really the most important metric of customer value. What matters most is how fast does the client put cash in your hand - if you can cover your needs for two months by working 150 hours in two weeks, then you have a lot of time to chase other work even if your effective rate is low and the size of the billing unimpressive. On the other hand, a huge project with a high rate of pay can kill you with lots of delays and slow payment if you wind up with no other work during a downtime.
The element which is missing is cash flow - it is touched on by several of the other elements but given that your business will fold if it runs out of cash it is really the most important metric of customer value. What matters most is how fast does the client put cash in your hand - if you can cover your needs for two months by working 150 hours in two weeks, then you have a lot of time to chase other work even if your effective rate is low and the size of the billing unimpressive. On the other hand, a huge project with a high rate of pay can kill you with lots of delays and slow payment if you wind up with no other work during a downtime.
One feature of my new web app is the evaluation of clients. At the moment I have the following criteria: 1. Size of billing 2. Payment speed 3. Amount learned on their projects 4. Fun had on their projects 5. Effective rate on their projects
Am I missing anything? Does anyone have any thoughts on how these criteria should be ranked?