James Schramko here, I want to share with you a number that you must know when it comes to your customers. And that is, what are they worth to you in dollars?
Now, this can be called customer lifetime value or lifetime customer value, whatever you want to call it, you need to know that number because that is the number that helps you decide how much you can spend to acquire a customer. So the amount that a customer is worth multiplied by a profit margin is roughly how much you’ve got to spend without losing money to acquire a customer. And, of course, the businesses where you make more per customer, things like retention, up-sells, having high-priced products can spend more to get a customer.
If an injury lawyer can make $100,000 from a client and they have a 50% profit margin, they could technically spend up to $50,000 to acquire a customer and still not lose money. So, they’re going to be able to bid higher on AdWords than their competitors if they only sell small packages. So know that number and then you can set about tracking your campaigns for the paid traffic.
Also, of course, if you, like me, do a lot of organic traffic, then things like your team costs and your hosting costs and editing costs. That’s a cost of doing business and acquiring a customer. And if you’re looking for ways to improve that value of what a customer is worth to you, that’s where I could probably help you. I can coach you inside SuperFastBusiness and I’ll help you increase the amount you can earn per customer. Doing things like growing your agency or helping your membership out or looking for opportunities within the current business you have that you’re missing and to help you find more profit there without even having to do that much. If you’re interested, get in touch with me.
I’m James Schramko and you’re watching SuperFastBusiness.com.
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