Why It’s Critically Important Savvy Entrepreneurs Know The Real Cost To Acquire A Customer!Part Four
So (ladies & gentlemen) as you previously discovered in part three of this ongoing series, even some of the largest, most successful businesses on the planet, know and understand, “why” it’s critically important, know and understand, the true cost to acquire a customer, correct?
And as you also previously discovered in part three,of this ongoing series, these extremely savvy entrepreneurs, know “how to” profit big time, as a direct result of understanding, this extremely critical (marketing) concept, would you not agree?
In fact, they base an awful lot of their current and future marketing/promotional budgets, on this one incredibly powerful marketing concept, simply because their typical return on investment, (ROI), easily exceeds 400–500%, or more!
Part four will focus on the additional, (passive) back end marketing strategies, and or tactics, that you can easily be adding to the mix!
So Why Is It So Critical That Extremely Savvy Entrepreneurs Know And Understand The True Cost To Acquire A Customer?
(Patient And Or Client!)
Quickly recapping from part three, after these extremely savvy executives for one of the major premium channels, such as HBO, Showtime or Cinemax etc.
They will routinely pay a big name pop superstar, such as Justin Bieber, Justin Timberlake or Lady Gaga etc; in excess of ten million dollars,for the broadcast rights to just one live performance, even though, on their best night, even if they charged upwards of $200 dollars per ticket,to their fanatical fans, for one of their shows, their typical venue 20,000 seat stadium, still wouldn’t allow them to gross that type of money!
So it was quickly revealed, part of their reasoning for doing so.And it’s because, (on average) an additional 1 -3 million (brand new) first subscribers, run and sign up, just so they can watch these type of major “one night” concert events.
And once the concerts are over, (at least) 70% of them, (or more) don’t immediately cancel their monthly subscriptions.Instead, (a certain percentage of them) not only keep their monthly subscriptions, for the nest 3 – 5 years, but they’ll also order, (on average) an additional 2–4 major pay per view events, that average anywhere in price from $29.99 –$79.00 dollars!
You can do the math!
Savvy Entrepreneurs Strategically Work The Front And Back Ends Of Their Businesses And Or Services!
Entrepreneur, (for just a second), let’s focus on that remaining 30% that left to chance, would simply unsubscribe, shortly after paying for this one night concert event.
Because remember, they could simply pay the $79 dollars (or X), in order to watch the event by itself. Instead, by signing up for one of the premium channels (previously mentioned), they save a ton, plus get the first six to twelve months, at a substantial discount!
And in order to really make it worth their while,here’s a few simple marketing twists, the premium channel execs, could at least inexpensively test initially, with a much smaller segment of those 30%,(which is still) hundreds of thousands of individuals, that typically sign up, only to save money on these major entertainment broadcasting events, and immediately unsubscribes, a short time after the concert event has ended.
Since the premium channel has the subscribers opt in email address, “why” not periodically send them special “VIP Subscribers Alerts”, informing, that each month their are an active subscriber, (meaning) their monthly subscription payment is current.
Are You Starting To Appreciate Why The Direct Marketing Approach Is So Potentially Profitable!
Every month, four guaranteed grand prize winners, (two males and two females), 18 and over, will the following.
1.) Guaranteed grand prize # one: One extremely lucky male grand prize winner, gets a $10,000 dollar, state of the art home entertainment system, delivered free of charge, to their home!
Can you Facebook, Twitter and ton’s of positive word of mouth and mouse, publicity?
2.) Guaranteed grand prize # two: One extremely female over 18, wins the exact same prize!Again, can you say huge positive word of mouth and mouse, viral publicity?
Retaining Customers And Or Clients Is A Whole Lot Easier When You Understand Your True Costs!
3.) Guaranteed grand prize # three: One extremely lucky male over 18, wins a free five year subscription, to whatever the current premium channel is, they’re paying for.
Plus, once a year, over the next years, they get to order any pay per view event, up to $100 dollars in value, and they can order for free!And if it’s over $100 dollars, they simply pay the difference!
4.) Guaranteed grand prize # four: And the exact same great prize holds true, for one extremely lucky, 18 year old female subscriber!
Now that (ladies & gentlemen) ought to be enough tangible incentive, to cause far more of that remaining 30%, that would typically unsubscribe in relatively short time!
Those types of incentives, should cause more of them to stick around!And of course, the longer they stick around, the more likely it is, they’ll order additional pay per view events!Don’t you agree?
Knowing The Total Lifetime Value Of Your Customers And Or Clients Makes It Possible And Far More Likely To Build An Effective Marketing Funnel!
So that’s “why” it’s extremely critical, that savvy entrepreneurs, such as yourself, know and understand,“what” it cost to acquire a customer, patient, and or client!Any questions?Now as is customary during this part of our show.
Please share your extremely valuable comments (in the comments section below) that you can
apply to your business, product or service in the next 30 days or less!
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Hi Mark,
It is so important, as you illustrate, to know the true cost of acquiring a customer.
You can’t know how much to spend on an ad campaign without that information. People often talk about advertising as being “expensive” or “cheap”, but those terms are relative to what you can expect to earn from your customer throughout your sales funnel.
I’ve seen car dealers do promotions where they actually pay people from their prospect list $50 to test drive a new car. That may sound like an awful lot of money for one single lead, but they can do it because they know what percentage of these people will buy a new car because of the test drive. Considering their profit from even a single sale, $50 a lead is a good deal for them.
I’m sure there’s not too many online marketers willing to endure that kind of cost to sell a $7 info product.
When you know your numbers, you know exactly what you can spend. If you’re just guessing, you’re probably just wasting a lot of money.
Interesting series, Mark 🙂
-Donna
Donna Merrill recently posted…It’s The Little Things That Big Dreams Are Made Of
Bingo!!
That is so it in a nutshell Donna! And the really sad part is, so many newbies,
unfortunately are not taught the business numbers side of their online venture.
And just like you so wisely pointed out, a successful car dealership, or
company or service X, readily understands, just how much they can or
can’t afford, in order to acquire a new or repeat customer, patient and or client etc.
And we’ve both, seen more than our fair share of beginners, pay upwards of
$150 dollars or more, in total upfront, out of pocket cost, to get a 50% affiliate
commission of $23.50!LOL!
And they ultimately fail!Thanks so much, for making it plain coach!
Mark Newsome recently posted…Why Extremely Savvy Entrepreneurs Definitely Need To Know What It Cost To Acquire A Customer!Part Two