How Realistic Are You?
January 18th, 2018 by Diane Conklin under Uncategorized. No Comments.
How realistic are you about where you are in your business? And, more to the point, are you measuring and watching closely enough to really know?
Do you know the answers to these simple questions…
Here are some of the basic things you should know the answers to:
- How many people are on your list (not your social media numbers)?
- How much does it cost you to get a client?
- What does the average client spend with you on their first purchase?
- How long do clients typically stay with you?
- What is the lifetime value of your average client?
Knowing these basic numbers allow you to make better marketing and business decisions because you are no longer guessing but working from the facts.
For example, if you know on average it costs you $100 to get a client and that the average client spends $500 with you on their first purchase, you know there is a $400 spread in there so if you only sold one out of every 5 prospects, then you are at break even in your business.
Unfortunately, most business owners don’t know this so they might have to talk to 10 prospects to sell one, which means they are actually losing $500 on every sale.
You may be surprised to know that losing $500 on every sale may still be a business model you can sustain and make a profit in…if your backend numbers make the front-end work. In other words, if your clients buy other things from you after the initial sale, and the average of that sale is let’s say $1,000 then you made a $500.
Do you see just in this one example how knowing this information might change the decisions you make about your marketing and how much you’re willing to invest to get a new client?
There are many more examples like this in your business. You just have to look for them and realize that knowing this information is extremely valuable to you and your business.
If you need some help with this, let me know…
By the way, even if you’re not a numbers person, you need to know your numbers. (That doesn’t mean you have to be the one putting them together…you can have your team member who like numbers do it for you or some CRM and other software programs make this pretty easy to pull as a report.)
