What is the key reason that your most successful competitors are doing better than you? You might be tempted to think that it must be down to the quality of their product offering. Or maybe you think it’s the standard of their service or even their prices. In reality it all comes down to their marketing. You need to be better at marketing than everyone else to become a leader in your industry.
It’s your marketing that brings in new customers and gets previous customers back to buy again. So how do you go about mastering your marketing? It all hinges on two numbers. Know these numbers and you can control your destiny. You may think I’m being over the top but don’t underestimate the power of these numbers.
1. The Lifetime Value of Your Customer
How much is an average customer worth to you over their lifetime? You might think the purpose of your marketing is to bring in a sale but what it is hopefully doing is bringing in a customer who will buy from you again and again. To be able to know how much you should spend on your marketing you need to know how much an average customer will be worth to you in the long term.
2. How Much You Can Spend To Buy A Customer
If you know how much an average customer will spend with you then you can figure out how much of that is profit. You can then decide how much you are willing to spend to get that amount of profit in return.
This all sounds like simple stuff, but if you know these numbers in your business the effects can be profound. There is no more guesswork on marketing spend and no such thing as advertising ‘seeming’ or ‘feeling’ too expensive. Your decisions become a lot easier when you know your marketing numbers.
We can help you:
- Calculate the average lifetime value of your customer
- Decide how much you should be willing to spend to buy
a customer
- Measure the effectiveness of your marketing to see what is working and what isn’t.
Gerry.heaney@claremount.net
Shaun@cmaoamgh.com