The Buzz Forge

bigbuzz August 10th, 2009

About 1997 I began asking my radio clients “What’s a customer worth?”

It’s one of those questions every business owner and manager should know the answer to and a question every advertising and marketing professional should ask.

Few had and answer other than “What do you mean…I’m not sure.” or “ $58.76, pointing to the last cash register receipt.

Wrongo! Think long term. Think a life time of doing business with that customer. If your typical customer spends $58.76 with you each month he’s worth $681.12 per year. If you keep that customer for 10 years that’s $6811.20 if he spends the same every month and you never up sell him.

Here’s your assignment:

What is your average monthly ticket per month? (months total sales / # of sales)

Ex: $63,836 / 1542 = $41.40

What is the average life of a customer? Do you have customers return often over a long period of time or do they come and go like the wind? For our example let’s use 3 years and they visit once each month.

Ex: 36 months x $41.40 = $1490

Each customer is worth $1490 to you.

Ah but what if that person tells just one other person about you. That person’s value just increased. And what if that customer stayed 51 months or spent an extra $2 each month?

Or what if you upset that customer and they leave after 23 months or tell others not to shop with you?

You can see the variables that can effect the value of a single customer and the prosperity of your business.

For now start simple and do the math. What is a customer worth to your business?

We’ll delve into this deeper in the near future.

Thanks for coming back to thebuzzforge. Feel free to leave a comment or shoot us a note.What’s a Customer Worth?

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jeff July 15th, 2009

It’s a great time to pick up market share. A great many of us have been holding off waiting to see what his economy will do. Well, it appears the turn is near.

I have seen and heard no less than 14 economist, market experts and business gurus pinpoint mid year as when we’d see an upward turn in the economy. Terms like “A damn of cash.” have been used to describe the current situation. That damn will break eventually and mid year is when most are predicting it to happen.

That means that by planning now you can get a jump on your competition. Right now the cost of voice, how much it costs to reach customers, is extremely low. Why? Because 1) media has discounted inventory 2) fewer of your competition is advertising. Instead of competing with maybe 10 businesses the number that is actively advertising is maybe 4.

You can reach more people more times more cheaply!

This downturn will end. Some will emerge stronger, larger more wealthy. Others will fade away. Choose your path.

Pick Up Market Share

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bigbuzz July 1st, 2009

Ever tried cocaine? I haven’t but I think it’s a drug I’d like, that’s a big reason I never tried it.

Apparently coke gives you energy, confidence, belief in your ability to conquer all. Unfortunately it’s temporary. And each time that temporary state of heightened ability subsides you need more cocaine. And each time you use it you user it you need more to reach the same peak. It is a downward spiral that ends with a devastating crash.

My guess is that most business people have avoided coke at least in the literal since. My guess is that most businesses that offer a product or service at a price have however experienced the cocaine effect of sales.

I’ve done it. I’ve lived large on deals narrowly escaping the crash. Sure there’s always another story to tell, always another reason to lower prices or not to raise them. But the energy expended in ‘working the magic’ is better spent building your company and brand.

There’s that word, BRAND. It’s a cliché today I think but if you dig to its core it is an invaluable concept.

Business Cocaine

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jeff March 11th, 2008

During weekday mornings I listen to a Hollister, CA based radio station via iTunes. It’s a noncommercial contemporary Christian station called Air1 that conducts pledge drives twice each year. Their company president was just on asking for donations and said something that really struck a chord.

It’s not necessarily a profound Christian statement, although I can see it’s relevance in a path following Christ, but rather a great rule to live by.

You Get What You Put Into It.

How obvious yet how often forgotten or worse ignored.

I look at my life, my relationships with family and friends, my work, my play, and I feel like a lazy bum. It’s not that I haven’t been successful in work but I am no where near my potential, AND I KNOW IT!

A look at my relationship with my wife and kids shows me how far from WOW I am. Everyone needs a WOW in their life. You know, after a hard physical days work your give it a “Wow, I’m tired.” or after a softball game it’s “Wow, that was a great game.”

or “WOW!” and you see as if you’ve been blind.

When’s the last time you said “WOW, that was great!”?

When’s the last time you laughed so hard you clutched your stomach and fell to the floor?

When’s the last time you felt like you gave your all and were satisfied with your day?

It’s been a while.

You Get What You Put Into It.

God promises to return to you ten fold what you give. Do you believe it?

I always thought of that in contributions to the church, tithing and such. I now wonder if it’s not a promise for everything in life.

You Get What You Put Into It!

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