How long do your clients keep buying your products or use your services? If they do stop did you ever ask yourself why? We sometimes forget that for a client to spend money he has to get some kind of payoff. Did he get all he can out of your business after just three months? Six months?
When you first get a client you spend money on advertising, you pay your sales department commission for the sales. So much money is flowing out of your business, it’s time to pump some money back in. A customers value is the profit you make off him after deducting all the costs.
Let’s assume you paid $1,000 for an ad campaign that brought you 10 new clients and that you paid a $10 commission to your sales team for each new client. That means the client start off at -$110 before you make any profit you have to cover the expenses. So unless your product profit is more than $110 you’re still losing money.
But then the clients buys again and you made more profit, but you didn’t have to pay for ads or sales. Each sale you make to that client increases his value. By the way, that same client can refer his friends and family to you and you will start making profits off the first sales.
Once you know what your average customer value is you can set goals for your business.
What do you do if the client doesn’t buy a second time?
There are many approaches, but the easiest is just calling him. Ask what he liked about the product and what he didn’t. Offer to compensate him if he feels that the product didn’t meet his expectations. And if you run into dissatisfied clients often try to redirect your ad campaign. You might be attracting the wrong clients.
Running a business is just making small corrections when needed. As long as you keep your finger on the pulse your business will grow.
I hope you found this post helpful, if so like it and share it with your friends. And while you’re at it, check out my ebook ‘level up your business’ a guide to starting your own business the right way.