I often get told by clients that they battle to measure their marketing efforts, well at the very least these are the marketing numbers you need to know. These numbers serve to focus ones mind. Once you have this perspective I can show you how to double your profits within a year.
What is the lifetime value of my average client?
It’s amazing how this question can change the focus of an entrepreneur. Add up what an average client will spend with you in a day, a week, a year and multiply that by five years or ten years or even twenty years. Really? Is that what one client is worth to me if I can retain him for that period? Well the answer is NO. They are worth much more because you haven’t factored into the equation, the affects of inflation, new product lines, new technology solutions, new services that you may offer in future.
What does it cost me to get a new client?
This is a straight forward question that every businessperson should be able to answer. Take the total cost of marketing including the cost to company of sales reps (Unless these reps only service existing clients), database management, PR efforts and dedicated time to customer acquisition and divide that cost by the number of new clients or customers. At The Online Marketer that cost is around R1000 for a website and at another client whose average sale value is R4200 it was sitting at R525 per sale. So what is the figure for your business? Very often the cost of acquiring a new customer exceeds the value of the first sales.
If you are one of the lucky few that don’t advertise and just wait for the people to phone you, then be greateful, but ask yourself if that is sustainable if someone else opens up in opposition to you?
How many new customers did I get in the last three months or year?
The final contextual question you need to ask is…
What do my clients think of my products and service to them?
I’m not asking you to assume anything here. You need hard facts. Not a thumb suck. Do you ask customers for this feedback via a questionnaire or via a comments book? Are you asking them if they would like something different? Would they like anything in addition to the services you offer?
Once you have this info you are ready to play the numbers game. How would you like to double your profits in one year?
Let us show you how.