Have you ever sat in your office and wondered why the phone isn’t ringing? Or why posting on Facebook/ Twitter or sending an email, or putting a flyer in your window isn’t getting you customers? Then the problem isn’t your lack of customers, it’s your mindset. This blog will take you through what you need to know in order to get your clients through the door.
The number 1 rule in any business should be to:
Know Your Numbers
Before making any drastic changes, make sure you know exactly where you are right now. You need to know your numbers. And I’m not talking any numbers, like the temperature outside, or your phone number, I mean these numbers in particular:
- Acquisition Cost- Your acquisition cost is the cost of a given marketing campaign, divided by the number of people who bought from you.
a. Cost per Lead =
Marketing Spend ÷ Number of leads
b. Cost per Sale=
Marketing Spend ÷ Number of Sales
- Lifetime Value =
(Average £ Sale x Number of Transactions (Over 12 Months) x Average Retention Time (Years))
- Average £ Sale- Add up your total sales and divide this number by your number of sales.
- Number of Transactions- The average number of times one of your customers buys from you in a year.
- Average Retention Time- The length of time a customer continues to purchase from you.
- Profit per Customer=
(Lifetime Value) – (Acquisition Cost)
Knowing these numbers allows you to know what you’ll have to pay to continually buy customers at a price value that will generate a return. How much can you realistically afford to spend on each sale in order for you to still turn a profit?
Change your mind-set. View your marketing as a purchase, an investment, instead of seeing your marketing as an expense. Don’t spend money and “hope” your campaigns will bring in enough customers. Be pro-active, test and measure your results, understand your numbers and find out which of your campaigns are profitable.