Whether your business is online or off, the most important number you need to know is how much is a new customer worth to you?

If you spend X amount of money on marketing…PayPerClick, SEO Consulting, PayPerClick, radio or TV time, etc. you simply can’t base your decision for spending the marketing dollars on how many initial sales come in.

Here’s what I mean:

Say you have an ice cream shop and you spend $500 on a marketing campaign one month. The campaign brings in a new set of 100 customers who each spend an average of $3.00. That’s $300 earned on the $500 marketing investment.

A short-sighted business owner sees a “loss” of $200. But in reality,
25 of those 100 new customers will return…over and over again in the coming year(s). The lifetime value of each of those 25 new customers could be many hundreds of dollars!

The short-sighted owner vows never again to “waste” his money like that.

Imagine the money being left on the table with that type of thinking.

If the market was large enough, just think of the profits that shop owner could be reaping in a few years if they consistently had those types of returns on $500 marketing investments! I for one would be HAPPY to “lose” $200 in trade for those new, long-term customers!

Now think about your own business and what the real value is for gaining a new customer. Only then can you make effective decisions about how and where to spend your marketing dollars.