Most experienced marketers understand the economic value of all loyal customers. After all, these singular individuals form the pool from which the marketer derives his income. A dollar amount counted on a monthly basis is an easy figure to calculate. Simply divide the total amount of money generated in any given month by the total number of customers the business has and the result is the customer worth on a monthly basis.
Understand that subscriber value is a different calculation … the amount of money in sales attributed to subscribers divided by the total number of subscribers on the business mailing list.
So for instance, a marketer may have generated $2,000 in a month’s time from 1,000 customers (a simple and easy example). $2,000 divided by 1,000 is $2. Therefore, on average, a customer is worth $2/month in revenue to that business for that month. So if the marketer adds an additional 100 customers next month, he would expect to earn an additional $200 (100 customers X $2/customer/month) assuming other things are relatively equal.
Yes the actual dollar amount per customer will change every month. But the exercise of figuring customer worth helps the marketer to focus on how to increase his income. He can increase the number of customers he has or increase the total amount he sells to his customers. Increasing the total amount of sales could be the result of new or additional products, increased marketing, or raising the conversion rate which means more prospects are making a purchase than before.
So the question becomes: “Do you know the economic value of customers who buy from your business?”
If your answer is, $47 or $95 or the price of your product, then that’s the wrong answer! You just identified the value of the first purchase.
A more important number to know is the “lifetime value” of a customer.
Now here’s a great key to your long term success in marketing: Did you know that you’ll spend five to seven times more money and more effort to gain to a new customer than you will to get another order from a current customer?
That’s a general rule, of course. For some products, prospects may need even more contact and visits to your site before they click the order button. Nurturing your customers is an important way that many businesses increase their overall sales.
You’ve already built rapport with the customer so when you send a new product offer, the customer wants to know what you have – especially if he was pleased and found great value in his previous purchase(s).
Finding quality products from trustworthy sellers in any niche can be a challenge. So buyers who received a great product in a timely manner backed by a solid guarantee are usually very satisfied and they’re much more likely to buy again from that same source rather than jump to a new unproven vendor.
To keep your loyal customers buying from you, don’t flood them with continual offers, and don’t just send them any old offer. Make sure that you send product offers that match the customer’s own desires and needs. Be aware of the customer’s prior purchase history and the price range of those products. It pays to also understand how a customer likes to receive his products … by download? from a protected member site? on CD or DVD? You are looking to keep the customer happy and by understanding his buying and consuming preferences you will be able to do just that.
Remember, the absolute worst thing you can do is to flood the customer’s email inbox with every type of offer that you come across. Before long, your customer will get tired of your emails and selling approach and begin deleting your messages without ever reading your communications. The next logical step for dissatisfied customers is to then unsubscribe from your mailing list.
You want a customer to see your email and say, “I want to see what’s new today!” That’s the kind of response that signifies a long term buying relationship. One of the prime ways you set yourself apart from other Internet marketers is the way that you nurture the connection you have with your customers.
It’s a wonderful gesture to send out an occasional free item as a “customer appreciation” gift. You’ll really stand out if you send a free gift that’s not part of an order. Make sure that the gift has relevancy and clear value for the customer. Don’t just send a random PLR ebook or other well circulated “freebie.” It’s better to make it something unique (even if it started out as a PLR product.) This is another way to remind a customer to drop back into your site and see what’s new.
Another strategy you might try is to let your customers market for you by offering a discount or bonus item when they recommend a friend who becomes a subscriber at your business. A loyal, repeat customer is gold – treat him/her as the valuable asset that they have become for your business. If you don’t let your customers down, they usually won’t let you down.
To your online business success!