Marketing Secret #90 How Much Should It Cost TO Get A Client/Customer/Patient??
Another question that comes up all the time is, “How much should it cost to get a new client/customer/patient?"
HOW MUCH IS IT REASONABLE TO SPEND TO GET A PAYING PERSON?
The following rule should be understood right away:
Your advertising (prospecting) generated clients/customers/patients should end up providing a small profit. Your big profits will come from referrals…and the additional sales made to existing clients/customers/patients!
No matter what your average revenue per client/customer/patient is, you should not have to exceed that figure to get them!
Some of you are throwing up when you hear that it might cost that much to get a new client/customer/patient!
Before you do, I want you to think about this logically:
If you get a new client/customer/patient and you profit $400 on average, you should be willing to spend $400 to get every new paying person!
What? Am I crazy? Why would anyone spend their revenue, just to get a new customer/client/patient? How do you make money when you spend all of it on getting new people?
Let’s answer this by discussing:
The lifetime value of a client/customer/patient!
This is a concept that very few business people ever get! But, the ones that do, make all the money!
Let me explain it by way of an illustration.
Everyone’s seen or belonged to something like a CD Club back in the day.
Anyway, they gave you 10 CD’s for $1. Then you have to buy four more in the next two years.
Let me ask you a question.
Do you really think that they made any money selling you 10 CD’s for a dollar?
Of course not.
What business are they in? How do they make their money?
Well, they are in the “Lifetime Value Of A Customer” business!
They know they can afford to spend whatever they have to spend to get you to join. I’m sure they have $50 to get you, between their direct mail, advertising, and the ridiculous price of the first batch of CD’s.
So, they must make this up by an average of more revenue than that from each customer over time!
Not tomorrow. Not today. But over the next couple of years, they will make money on you!
They couldn’t stay in business if they didn’t.
So, what does this have to do with you?
How about everything!
See, no matter what you do, you have to figure out the lifetime value of your customers/clients/patients…and then figure out what you can afford to spend to get a new paying customer/client/patient.
If you are too broke to afford the entire cost it takes to get a new client/customer/patient, then use all the free or almost free methods in this system and reinvest your profits into the advertising…so you can quickly explode your business! (Things like Secret #43, #47 and #54!)
Or, make sure you operate in the short run, with low overhead, until you get enough cash flow to expand your new customer/client/patient acquisition by spending more of your initial revenue made off of new people.
I’m serious when I tell you that hardly anyone knows what I’m talking about.
Most business owners and sales people are so busy trying to keep the home fires burning, that they ignore this crucial concept.
See, if you understand this, and the next secret (Back End Sales) you’ll be in a position to grow exponentially, instead of arithmetically.
Why? Because if you become bold enough to spend more money than anyone of your former competitors to get new clients/customers/patients…you will OWN YOUR CATEGORY!
If you do more promotion, more real direct response marketing, more press releases, more seminars, and so on, how could you not end up on the top of your industry?
You know what only a handful of business people know.
You know how to get the phone to ring.
You know how to get responses.
You know how to get sales without begging, pleading or praying!
And, now you know the real secret of long term success: