How Much Are Your Customers Really Worth?

Written by David Hoffman Friday, 22 April 2011 09:42

Do you know the economic value of each customer who does business with you? 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.

Do you know the economic value of each customer who does business with you? 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.

It's much more important to know a customer's "lifetime value." Do you realize that gaining a new customer will cost between five and seven times as much money than simply getting an additional order from one of your current customers? It's harder to do, too.

That's a general rule. 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 to increase your overall sales.

By the time you send out a new product pitch, you've already developed a rapport with your prospects and customers, so they'll want to know what you're offering. It can be challenging for buyers to find high quality products being sold by reputable, trustworthy sellers, so selling a good product that's backed by a solid guarantee and delivered in a timely manner will make your customers much more likely to buy again.

To keep your customers buying, don't flood them with just any offer. Make sure that you send product offers that match the customer's prior purchase type and overall price range. Some customers like to download information products while others want to receive CDs or DVDs.

Knowing your customer's preferences is essential, because that's how you'll know that you're offering what the customer is most likely to buy. One of the worst mistakes you can make is flooding your customers with every type of offer, because they'll soon delete your emails without even opening them.

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 means a long term buying relationship. What sets you apart from other Internet marketers is in the way that you nurture connections with your customer.

Send your customers a free "customer appreciation" gift from time to time. If you send one that's not part of an order, you'll really help yourself stand out. A free gift is an effective way to remind your customers to come back to your site and check out your new products.

You can also get your customers to help you market your products by offering them a reduced price or bonus gift if they refer someone who buys one of your products. Repeat customers are worth their weight in gold, so treat them as the valuable business assets they are.