Do you know your Visitor Value?
In order to find this out, we first need to find out what your average customer is worth to you.
If you have been in business for a while you should know what each customer is worth to you, and how much you are spending to acquire that customer.
Your average customer for example might spend $2,000 with you every year, but would you know that?
And do you know your Return on Investment? – How much you are spending to get your average visitor to become a customer? And how much profit are you getting from that investment?
If you start with the the idea that the minimum ROI you should be settling for is 100% where you double your money even in the worst case scenario, then you’re a lot more likely to succeed.
So the most you should be spending a year to get your $2,000 a year customer is $1,000.
There’s no law against spending more, after all, most offline businesses and businesses selling physical products that have more complex logistics, will often have a ROI of around 30%, and they’ll be perfectly happy. But they’re working too hard IMO.
The reason you got into internet marketing is because you don’t want the hassles of a traditional business, or the abysmal ROIs, right?
Now what if you look at your figures and discover that your average customer spends $12,000 over a lifetime, does that affect how much you initially spend to get them to become a customer?
I supposed that depends on how long you plan to be around. Most business owners don’t analyze their statistics, but out of those that do, a lot don’t think it’s worth looking at projected figures beyond two years, but if you look at the figures since you first started, you will be much more prepared in terms of how much you should be spending on advertising, salaries and everything else that ends up landing you that customer.
You need to start with the end in mind and work backwards. So we start by finding out what our average customer is worth, then we find our Visitor Value. But we also need to know:
- How many visitors do you get to your site a month?
- How many of those become subscribers? (Optin Conversion Rate)
- How many buy from you? (Customer Conversion Rate)
- How many times do they visit your site before becoming a customer?
- How many times do they stay on your list before becoming a customer?
- How many emails do you get a month?
- How many phone calls a month?
- What are the Conversion Rates for those who contact you?
These are all things that you need to find out. And then you need to go through each of your marketing costs, and find out which are producing the best results.
So many businesses blindly hire marketing companies to do all their advertising for them, without ever knowing this stuff. They could even be making a loss and not know it for six months, because they’re buying every marketing tool available and don’t test or tracking anything.
If you take time to find out this data, you will save yourself so much time and money in the long run.
