How much is one consumer really worth?
Prior to you can start an ad campaign, you need to know exactly what your break-even point is, to find out if you'll acquire a substantial (or any kind of) return on your financial investment (Return Of Investment).
This must be pretty common-sensical, but I have actually seen loads of businesses jump into $10,000 advertising campaigns for a $20 items, only to sell a couple hundred of them and wind up additionally in the red.
If your services or product is a less costly, one-time acquisition (for instance, you sell fleece capes with certain company logos embroidered on them), your advertising and marketing strategy should be different from a person who markets a solution that costs $ONE HUNDRED a month and is repeating (believe: Mobile phone or insurance policy).
However, various other elements compared to immediate sales also reach play, which is why I liked this infographic kind our buddies at Kissmetrics, which graphes the "worth" of one Starbucks consumer.
Starbucks (I often call them "FourBucks" due to the fact that I cannot leave there without investing at the very least $4, also for a plain mug of coffee nowadays!) offers exactly what are ultimately affordable, consumable products. It's hard to create a business on a non-subscribe-able $4-$6 product, unless you can get people addicted to them (and afterwards implicitly subscribing via repeat purchases over the course of a lifetime).
Chew on this: Were Starbucks to spend $10,000 to get each customer, they would certainly still turn a profit (eventually).
[inscription id="attachment_512" straighten="aligncenter" size="1000"]https://www.hundredsofcustomers.com/wp-content/uploads/2012/10/Lifetime-Value-of-a-Repeat-Customer.png">
(Click to expand) [/ caption]
