If you’re in business there are good times and bad times. And when times are difficult it’s easy to complain, whine and be depressed about all sorts of things.
So if you don’t have all the business you want, it’s up to you to do something about it rather than complain, blame the economy etc.
So what can you do?
Using the “If it’s going to be it’s up to me” philosophy, get into action and do two things.
- Figure out what else you can sell your past and current customers (“Do you want fries with that?”)
- Get more customers in the door.
Let’s take them in turn.
I’m willing to bet that you haven’t sold everything you possibly can to your current and past customers. Rather than repeat myself, I’ve written an article on this here
So let’s move onto getting new customers in.
As one of my mentors, Mal Emery would say, it’s all maths and psychology.
The psychology revolves around what’s in it for your customer to do business with you.
The maths is how much can you afford to spend (advertising, networking, website and any other activity you undertake) to get a customer in the door.
Today we’re going to concentrate on the maths. And you can get an idea from figuring out the average lifetime value of a customer.
For example if the average purchase is $100 and over the next 12 months, then come back 8 times, they’ve spent on average $900 with you. And if they keep coming back for 3 years they’ll have spent $3,300.
So theoretically you could spend $900 to acquire them and still make $2,400 over their lifetime with you.
Now I’m not suggesting you spend this – but it does give you an indication of what your marketing budget could be.
And knowing this figure, you could plan a marketing campaign knowing that the maths adds up.
To help you do the maths, we’ve got a spreadsheet that does the calculations for you. Just plug in the numbers and you’ll be pretty amazed at what a customer could really be worth.
“The Total Customer Value spreadsheet is a terrific tool." - David Ruthenberg CFP,Dip F.P., PATRON Financial Advice
If you’d like a copy of this spreadsheet, just hit <reply> to this email and put “Lifetime Value Spreadsheet” in the title and we’ll email it to you.
Till next time,
Barbara & Rashid.
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