Do You Know Your Numbers…
January 2nd, 2012 by Diane Conklin under Direct Mail, Marketing. No Comments.
Jeff Paul says marketing is psychology plus math. You need psychology for the sales part of the equation and math to know what your profits are, to see your return on investment, and to know your costs.
This may seem simple and obvious. And, it is. Or you would think, but when I consult with clients, whether they have been in business a very short time, or are running a multi-million dollar business, most of them have no idea what their numbers are.
You might be asking what numbers I’m talking about, so let’s get a little more specific about what numbers are important.
Let’s start with client acquisition first. Do you know what it costs you to get a new client? In order to make a determination as to how much you can spend to get a new client, you have to know what the value of the client is, and what the average lifecycle of the client is. In other words, once somebody buys from you, how long do they remain an active client, attending events, continuing to buy products and services from you? It might be 18 months or longer, or it might be 90 days. Whatever the number is for your business, you’d better know what it is.
