FROM CACHE - en_header

Would you spend $100 for a new customer?

Shopify Partner
98 0 12

It's a reasonable question, but many start ups respond "not a chance." Especially with the temptation of online pay per click advertising, the response typically continues "why spend $100/customer when I can get a click for $0.05?"

One of the main reasons I read, and respond to, so many of these "I've had 5,000 visitors and no sales" posts is the same reason I write these posts. Just to help, set an expectation and help you grow a successful business. Many new businesses gasp at the prospect of spending $100 gaining a new client. This $100 figure comes from standard operating procedures of many successful marketers and the big brands, and you can learn from it.

Hindsight is always 20/20 but you can look back at successful brands and pull the information on what works. Take a brand that sells a product for $1, sometimes less, and ask "why would I spend $100 getting that customer?" It's simple really, by gaining one customer you have them as a lifelong partner in your brand, that $1 product gets purchased daily/weekly/monthly over years and is exponentially more valuable than the $100 initial spend. Many of my clients have been with me for 2, 5, 10, 15+ years so any budget I've spent gaining their business has more than been well spent, and I'll be in business for well over another 20 years. The ROI is in the thousands of percentages. I help them build a successful business and they in turn keep hiring me, one hand washes the other, and just like that $1 can of Coke/Pepsi/Whatever you buy over and over because it's delicious it's a partnership.

For example, I went in to a client meeting on Tuesday with a potentially large client that was anything but a sure thing. In order to present well (they went from 1,200 candidates down to 6, and I was 1 of 6 presenting), my total out of pocket cost of my 1.5 hour presentation was somewhere in the neighbourhood of $3,500 (parking included). But wait, there's more, the executive I was speaking to ran a multi-billion dollar brand, and taking an hour and a half of his time probably cost his business $150,000+.

So my tip, before you look for the cheapest way to market, stop. Change directions and market to the most valuable customer and be the most valuable provider. 

Looking back on my client base that's 20 years deep if you were to ask me "would you spend $100 gaining that client?" I'd say "not a chance, I'd spend thousands." Hindsight is 20/20 and a few great clients are more valuable than tens of thousands of clicks.

Scott Luscombe

Creatibly Inc. Brains Matter. | | 905-550-5023
Replies 0 (0)