how experts grow their business stop wasting marketing budget & buy customers

19
HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

Upload: travis

Post on 17-Jan-2015

426 views

Category:

Business


1 download

DESCRIPTION

The moment you understand what you can afford to spend to BUY a new customer, based on what that customer will be worth to your business, in terms of profits in transaction one, in year one, and in subsequent years, you will stop wasting money on advertising and start only investing in sales generated customer acquisition. Your waste factor will drop about 90%!

TRANSCRIPT

Page 1: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW EXPERTS GROW THEIR BUSINESS Stop wasting

marketing budget & buy

customers

Page 2: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

The moment you understand what you can afford to spend to BUY a new customer, based on what that customer will be worth to your business, in terms of profits in transaction one, in year one, and in subsequent years, you will stop wasting money on advertising and start only investing in sales generated customer acquisition. Your waste factor will drop about 90%!

Page 3: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

Learn how much your customers

are worth to you!

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 4: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

Figure out what a customer is worth to you over a

purchasing lifetime – the total, aggregate profit that

each customer can generate for you, minus all

advertising, marketing and service expenses!

Page 5: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

If you are a bean counter, the exercise is technically known as reckoning an individual customer’s

“marginal net worth”

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 6: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

If you haven’t calculated your marginal net

worth yet, here are the steps to

follow:

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 7: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

• Step 1: Calculate your

average sale and your

average profit per sale.

• Step 2: Compute how much

additional profit a customer

is worth to you by determining

how many times he or she

comes back. Be conservative.

• Step 3: Compute precisely

what a customer costs by

dividing your marketing budget

by the number of customers it

produces.

• Step 4: Compute the cost of

a prospect the same way.

• Step 5: Compute how many

sales you get for so many

prospects (that’s the percentage

of prospects who become

customers).

• Step 6: Compute the

marginal net worth of a

customer by subtracting the

cost to produce (or convert) a

customer from the profit you

expect to earn from a

customer over the lifetime of

patronage.

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 8: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

EXAMPLE

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 9: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

Average

profit on

the first

sale

Repurchases

that year

Average

reorder

amount

(Gross

Profit)

Average

patronage

life

Every new

customer is

worth

$75 + (3 X $150) X 2 years = $975

Average new customer

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 10: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 11: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW TO

GROW A

BUSINESS 1) Acquire more

customers

As long as you can buy a

customer for less than

$975, you can buy

customers all day long.

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 12: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW TO

GROW A

BUSINESS 1) Acquire more

customers

The most lucrative

short-term way to get

more starter

customers.

Spend more buying new

customers.

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 13: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW TO

GROW A

BUSINESS 1) Acquire more

customers

Increase the incentives

for new customer

acquisition

Think strategically

Give the revenue from the

first sale to the sales

person

make your profits over the

lifetime of the customer

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 14: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW TO

GROW A

BUSINESS 1) Acquire more

customers

Partner with

companies whom have

your target market and

reward them for co-

promoting your

product

Think strategically

Give the revenue from the

first sale to the partner

make your profits over the

lifetime of the customer

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 15: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW TO

GROW A

BUSINESS 1) Acquire more

customers

Pay for referrals

Think strategically

Give the revenue from the

first sale to the referrer

make your profits over the

lifetime of the customer

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 16: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

HOW TO

GROW A

BUSINESS 1) Acquire more

customers

Go to all your

struggling competitors

and offer to buy their

customers

Think strategically

Give the revenue from the

first sale to the competitor

make your profits over the

lifetime of the customer

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 17: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

Before acquiring more customers ensure you have systems to keep those customers w

ww

.linke

din

.com

/in/t

ravi

soke

efe

Page 18: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

ww

w.li

nke

din

.com

/in/t

ravi

soke

efe

Page 19: HOW EXPERTS GROW THEIR BUSINESS Stop wasting marketing budget & buy customers

TRAVIS OKEEFE Here: [email protected] Everywhere: www.linkedin.com/in/travisokeefe