If business owners could bring in an extra 5, 10, 20, 100, or 1000+ customers a month-every single month, they would. How do business owners achieve this? To get more customers, business owners must be willing to break even or incur a slight loss. After breaking even or incurring a slight loss they must be able to turn it around, while making profits on back-end repurchasing.

Facts

First, business owners must be able to identify and comprehend exactly how much combined profit their customers mean to their business, during the whole of their relationship. This information will help business owners determine how much time they should keep putting in the relationship. Second, business owners need to now the lifetime worth of their customers. The total lifetime value of a customer is measured by many things. One has to look at the total profit of an average customer over the residual sales, and that is without all of the marketing, advertising, and service fulfillment dues.

For example, what if your average new customer brings in for a business owner, an 100\$ profit, on average, on their first sale? Then that customer repurchase three more times in the same year, and the average reorder is about 200\$. Then the business owner, on each 200\$ reorder, will make 100\$ gross profit. Next, lets look at an average customerâ€™s life that lasts for about two years, and if every new client is worth about 700\$. A business owner would be able, in theory, to spend up to 700\$ to bring in a new client, while still breaking even.

Calculate

How to do this? You must calculate your average sale and your profit per sale. Then calculate how much more profit our client is worth to you. To do this you must look at how many times your customer comes back to buy. Third, figure out what a client cost, do this by dividing the marketing budget by the number if customers it generates. Also, determine the amount of prospects the same way. Fourth, determine how many sales you might get, if x- stands for the number of prospects. Also, remember that 0% of prospects become clients. Lastly, determine the marginal net worth of a customer. Do this by subtracting the cost and expenses to get the client from the profit that you expect to earn from the customer over the lifetime of his or her patronage.

Records

Remember to always keep records. They are an essential, and be persistent when doing it. It will take time to build up this repurchasing base, but if you stay the course it will pay off in high monetary benefits.

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