Many people tell me that they can’t afford to spend any money on Marketing. Well, let me assure you, it is more important than ever in this economic climate that you concentrate on Marketing to increase your new customer base. The other thing to bear in mind is that it is only an up-front cost if done properly.

Let me explain more:

Do you know the average Lifetime Value of your customer? How much is a customer worth to you over the next year, 5 years and 10 years?

If you don’t know the answer to this question then take the total profit that you have made in a year and divide by the number of customers that you sold to in that year, that will give you the value of one customer in one year. This number can be multiplied by 5 and 10 to give you an approximate value over those longer periods of time. This can only be done if a customer gives you repeat business each year. A lesson for another day……..!


Annual profit for 1 year = £30,000
No. of customers = 300

Avg. Value of 1 customer in year 1 = £100
Avg. Value of 1 customer over 5 years = £500
Avg. Value of 1 customer over 10 years = £1000

So how much would you be prepared to spend to acquire a new customer if you know that the value of that customer is £100 in 1 year, £500 over 5 years and £1000 over 10 years?

Let’s look at the cost of a direct mail activity;

Cost to send 500 pieces of direct mail = £180
You get 2 new customers from this mail out, worth £100 each that = £200 in year 1, £1000 over 5 years, £2000 over 10 years.

This changes the thinking from, how much you are going to allocate to your marketing budget, to how much you will spend to acquire a new customer. VERY POWERFUL!

Many of the strategies above won’t cost you anything but for the ones that are going to cost you money, the secret is to TEST and MEASURE in small amounts before deciding whether they work and then increasing the same activity to a larger number of people.

Add to all of the above Repeat and Referral Business and you will have more business than you ever thought possible.


Blog by Dylis Guyan

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