Part 1 in a series about The Customer

What is your best customer worth to you? I ask because all business owners would like to replicate their best customers. Those top 20% of your customers produce 80% of your revenue, right?

So the trick in marketing is attracting as many of those Best Customers as possible so that your revenues continue to increase each year.

How long have you had that Best Customer? A month? A year? Five years?

How many times has s/he bought from you? Is that once a week, a month, a quarter? Well, you get the idea of where I’m going here.

Cost to Obtain vs. Potential Profit

In planning which marketing tactics to employ to attract new customers, it’s not unusual to gasp when you review the cost of any one venue against potential revenue. “But that’s more than the average sale amount!” you protest.

Hold on. Don’t panic.

You’re currently thinking only short-term. One little sale of one item instead of your best customer’s purchase of a dozen items over several years. Think long-term.

Remember, plenty of businesses have to lose money at first in order to reap the profits in the long haul. Look at Amazon. (Should I have made this the quiz in the issue? No, I won’t make you wait and scroll down.) Ten years. It was ten years before Jeff Bezos’ baby made a profit.

In It for the Long Haul

So you’ve made the decision that you’ll have to spend more up front to obtain long term clients. Good. I’ll leave you with a few questions before unveiling one method of calculating a reasonable cost of acquisition for that Best Customer: What is she worth to you? Over X period of time, how much will you make in gross sales from this Best Customer?

At about this time some of my clients’ eyes open wide. This idea paints a very different picture than just imagining what the average customer spends on their first purchase alone. Suddenly new possibilities become available. New ideas for marketing begin popping up unexpectedly. New opportunities are everywhere if we just make ourselves available to recognize them.

Next week I’ll unveil one method of calculating a reasonable cost of acquisition. In the meantime, think about how to court that ideal client. Roses? A gift basket? Tickets to a great event? What makes her feel like a valued client so she’ll come back over and over again? And how do you want your best customers to feel about your products and services? What do you have to do to make them feel that way? (Perhaps stop asking so many questions! Ha!)

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
Jeff Bezos, Amazon