Are you effectively utilizing your customer lifetime value formula to make more money?
(And How The Ultimate Insiders Make An Absolute Fortune By Utilizing It!)
So why so much fuss over thoroughly understanding the all important customer lifetime value formula, and how it can and will effect your overall bottom line?
Because when you can truly appreciate this incredibly powerful and universally accepted (must understand) proven marketing concept. You can systematically begin to run marketing circles around your would be competitors.
Case in point; let’s take an overall broad view of the anatomy of a successful information marketing business. And how that broad term pertains to how you might successfully go about marketing various ‘how to’ information products and services (that greatly) vary in price, to a very specific niche audience.
Why The Customer Lifetime Value Formula Is So Darn Important To Your Long Term Success!
First of all, take a look at how many actual customers you will need to buy from you, depending on what the price of your product or service is.
Watch how much concerted time & money resources you have to allocate in order to be successful. Meaning- in order to reach your stated goal.
For ex; suppose one of your long range goals is to earn at least six figures annually ($100,000 ) dollars selling various how to’ information products and or services. Take a serious look at what actually lies ahead, depending on the actual price point that you enter your specific niche market at.
1.) If the price of your initial how to product (or service) cost your consumer $100 dollars (or as a proven market tested ) price point of $97 dollars.
In order to reach your long range goal of grossing $100k per year from this one activity alone, then you’ll need at least 1,000 separate consumers to spend $100 dollars each. ( Your $100 dollar product x 1,000 individual consumers = $100,000 dollars in gross income.)
2.) If the price of your ‘how to’ information product or service costs, $250 dollars, then in order to reach your long range goal of earning $100,000 dollars in gross income, then you’ll only need 400 separate consumers to buy something.
(Note: None of these preliminary initial front end purchases take into account any potential add on/upsell products or services.)
Once You Do The Math And Discover With Pin Point Accuracy What Your Best Customer And Clients Are Actually Worth To Your Business…(It’s A Whole Lot Easier To Plan A Long Range Realistic Marketing Budget!)
3.) If the price of your product or service costs $500 dollars, then you only need 200 individual consumers to buy it. Look at where you are (to this) point vs where you started out.
Your first price point of $100 dollars requires at least 1,000 consumers, where as price point # number three, only requires 200 individual consumers to reach the exact same goal of grossing $100,000 dollars.
4.) If your ‘how to’ information product or service costs $1,000 dollars, then you only need 100 individual consumers to purchase it.
5.) If your ‘how to’ product or service cost each consumer $5k, then you only need twenty individual consumers to purchase it, in order to reach your long range goal of grossing $100k per year.
6.) And finally, (not really), if your ‘how to’ information product or service costs your consumers $10k each, (congratulations), you’re now officially a real life guru and or guruette!
In which case, you only need ten serious people to purchase from you per year.
Of course this incredibly broad overview doesn’t take into account, that as your price point increases, you’re going to need to be extremely good at converting those subscribers to your (all important) opt in list into eventually buyers.
And you’ll also need to be very good at consistently generating highly targeted traffic (initially) to your lead capture page and then consistently following up with them,via inexpensive email.
And ultimately persuading a certain percentage of them to become long term customers and clients.
How Understanding The Long Range Lifetime Value Of Your Customers And Clients Puts You Light Years Ahead of Your Would Be Competitors!
Not wanting to beat a dead horse here, but there is an incredibly successful online marketer that makes a ton of money in the (wide open) female fertilization niche.
This information marketing entrepreneur truly gets it. Because she (collectively) markets ‘how to’ information products and services to her enormously receptive opt in list, covering all price points.
For example she expertly markets the following ‘how to’ information products and services. She sells tons of, audio CD’s, low front end introductory ebooks and DVD’s.
She has beginning, intermediate and advanced home study courses on the subject. She hosts incredibly popular offline events like 1-5 day pricey boot camps.Not to mention pricey get away retreat events as well.
She routinely hosts free online 90 minute “No holds barred” Q& A sessions with her subscribers.
And she pays through the nose to bring on special guest -medical- experts to answer specific questions & concerns that her targeted niche audience may have. She also routinely has these experts appear at her incredibly popular offline live events as well.
She also routinely interviews world renown experts and freely gives the interviews away to her lists as special free pre-signup bonuses for doing this or that! You go girl!
All in all (she privately) admits that her ever growing ‘how to’ information marketing empire, grosses a staggering 2.5 million dollars annually. And there is simply no end in sight.
So hopefully you can see, with this extremely watered down (real life) example, why the customer lifetime value formula, is so darn important and incredibly profitable, when properly implemented.
Don’t you agree? As always, if you got any value of of this post, please Digg or tweet this. Thanks!
And be sure you grab your explosive free 22 step small business marketing idea kit series. Because it will help you master your effective communication in marketing skills. It’s a $97 dollar value and it’s free!
