How To Calculate The Value (and Cost) of Getting a New Customer


See on Scoop.itBusiness Attractitude

Robin Good: Do you know how to calculate how much a new customer is worth to your online business?

 

Knowing that value can help you make better strategic decision about how much to invest in advertising, marketing and customer service activities to retian the good customers you already have.

 

But you need to know first how much they are really worth to you.

 

From the original article: “It’s strange, but many small-business people have no idea what a good regular customer is worth to their business.

 

By calculating that figure, you should gain a better idea of what you’re willing to invest or risk to attract a good, regular customer.

 

The calculation will also tell you how important it is to keep your existing customers happy.

 

The cost of retaining a customer and even expanding a customer’s value is much less then getting a new customer.

 

To determine what you’re willing to invest in marketing, first discover what an average new customer is worth to you.

 

To determine their value, answer the following questions:

 

1. What is your average sale (transaction amount)?

 

2. What is the frequency of your average customer?”

 

Useful. 8/10

 

Find out which are the three other key questions to ask by reading the full article here: http://www.entrepreneur.com/article/223426 ;

See on www.entrepreneur.com



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