How Much is A Client Worth To You?
How Much should you be spending on getting and keeping new clients?
Deciding how much to spend on your marketing can be a really difficult decision. So I'm going to make it as simple for you as possible with these three simple rules and a invaluable marketing tool called the LTV Calculator (It stands for the Life Time Value of a client / member)
Rule no 1.
Spend as little as possible. What you do invest in marketing ensure it makes you a good return.
Rule no 2.
Test and measure all your marketing campaigns. If you find a campaign that isn't working for you dump it and invest your money into one that is!
Rule no 3.
Consider the LTV (Life Time Value) of a client or member when deciding how much to invest in your marketing efforts. Once you know the LTV of a client / member you'll be in a much better position to choose how much you are prepared to spend on:
The LTV Calculator
How to use it.
Number of session/programs:
Here you put the number of sessions or programs that your average client commits to per year. Here's an example.
Traingin Sessions
You average client may commit to 6 session 3 times per year so here you would put 6 x 3 = 18
Programs
You may run programs that most of your clients join and you may find that your average client will do the program 2 times per year. So here you would simply put 2
Memberships
You may take memberships and find that your average member takes out a 12 month membership. You would simply put 1
Average spend:
This is the amount that you average client / member pays per session or program. Here's an example.
Training Sessions
You may charge $40 per training session
Programs
You average program may cost $980
Membership
A 12 month member ship might be worth $450
Years Retained:
Here you put the amount of years that you retain your average client / member
Average Referrals Per Year:
This is the amount of referrals your average clients bring you.
Go ahead and give it a try, you may be very surpised at what you average client is worth!
What it all means:
Client is worth:
This is the amount of money that particular client will generate for you.
Each person They refer is worth:
If the pattern continues and you keep up your marketing and nurturin programs this is what each referal is worth to your business.
If you' re not able to get these figures for your business chances are your not testing and measuring your marketing results. Testing and measuring your results is crucial to the development and growth of every business.
With testing an measuring it's almost impossible to know what marketing piece's are working for you and which ones are wasting your hard earned dollars. Click here to learn more about testing and measuring.
