Have you ever stopped to think about the actual lifetime value of a customer? It doesn’t just necessarily mean that one customer, but everyone that customer has also sent your way whether that’s through face to face referrals, testimonials or simply checking in on socials.
When you are calculating the cost of acquisition of a customer these are all factors that you need to consider and the reason why the longer you’ve been in business the easier it gets.
Say you were to do a promotion. You give a first-time customer a 20% discount. Just to make it easy, let’s say the total is $100 and they’ve saved $20. You’ve made $80, which should cover your expenses and advertising costs to aquire that customer. Hopefully there’s a little profit as well.
Depending on your business that customer might come back a few more times. They tell their friends and some of them use your services. They leave a review which has sparked someone else to use you. A couple of those people have ‘checked in’ to your business on socials and have brought your business in front of more people that didn’t know you existed.
Now how many people are aware of and have used your business from that 20% discount?
Pretty powerful huh?
Check out this video on how I use promotions in my business….