The Invisible Organization: How Ingenious CEOs Are Creating Thriving, Virtual Companies by Mitch Russo

Author:Mitch Russo
Language: eng
Format: mobi
Publisher: Best Seller Publishing
Published: 2015-05-19T14:00:00+00:00

What is a Client Worth?

The reason to ask a question like this is to determine how much you can spend for acquiring a new customer. By digging into your past marketing expenses for a specific period of time and then comparing that to your gross sales for that same period, you can see what it costs to acquire a client.

The mistake I made as a new business owner was to compare my marketing expenses to the sales of my entry-level product. Jay Abraham introduced me to the idea of “lifetime value of a client” by helping me to see what each new client spends over time as long as they remained my customer.

This opened my eyes: I could actually lose money on my first sale as long as I would be profitable over the lifetime of the client. I had redefined the “value” of a client. I could actually spend more on marketing than I had initially thought. And I did spend more, much more, and expanded my client base quickly as more profitable clients entered into the sales funnel and stayed longer than before.

Understanding this simple concept changed everything. Now let’s determine the lifetime value of your client. By carefully thinking through and answering these questions, how you look at your customers begins to shift.

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