How To Build A Fast Growing Business – PART 2: The 30-Day Customer Value Approach

How To Build A Fast Growing Business - PART 2 The 30-Day Customer Value Approach (4)

 

Following on from Part 1 the next part of your Domination Strategy we want to talk about is your 30-day customer value. This is extremely important because this will determine whether or not you can grow your business as fast as you want to. What are we talking about here?

First of all, we know that, in order to get new customers, we need to market. Marketing activities could be networking, online advertising, magazine advertising, all these things. They basically boil down into one of two categories. You’re investing your time and energy, and then you’re trying to generate potential new customers. For example, investing your time and energy could be going to networking events or replying to comments on forums. Essentially you’re trying to get people to resonate with your message, and then think “Okay, you’re interesting. Let me hear more from you”. The trouble with time and energy is that you have limited amounts of it. In a 24-hour period, you can only invest a certain amount. You can never get time back, and your energy is limited.

The other way you can do it is investing money. If you’re investing money into marketing activities, you can do that with no time, because you could be buying multiple adverts, multiple magazine spots. You could have multiple team members writing articles for you. The purpose of that is to generate potential new customers. All of that costs money. If that money is going out, to generate potential new customers, but for some reason your sales aren’t as high as they should be, or your customers are not spending enough money, you’re not going to be able to replicate and scale this because you’re going to run out of money.

This is the problem for most businesses. Most businesses have a mix of customers. You’ve got some low value customers, medium value customers, and most businesses have a few high value customers. Now, when you’ve got low value customers, it may be that they spend a little bit of money in the first 30 days, with you. For example, let’s say you spent £50 on an advert, and this customer spent £60 with you in the first 30 days. You think you’ve made £10, but you haven’t actually because you’ve got to pay for the costs of doing business, costs of raw materials and staff. You may have actually lost money on that customer.

Then people say, “What about lifetime customer value? What if this customer buys from me, every month, twice a year, for the next 4 years?” Okay, yes. In the long term, you’ve made money from them. The problem is, in the short-term, your bank account is getting empty, quicker, because of the money you’re spending on marketing rather than the money coming in. Even though in the long-term you could have a profitable business, you are actually losing cash. This means you cannot scale. If you don’t have the right customer value, the right 30-day customer value, you’re not going to be able to spend the money on marketing or have excess money to reinvest.

This is where we talk about specialists versus generalists. We all know the difference. If we had a heart problem, we wouldn’t want to go to a generalist, we’d want to go to a specialist. Why? Specialists do one thing or a couple of things extremely well. They’re experts. We can see that specialists have higher value customers whereas generalists traditionally have low value customers and medium value customers. If we think back to the 30-day customer value, for specialists, when they spend their money on the marketing, they get a higher value or a high value customer. They’re going to have money to reinvest back into marketing straight away and deliver the service. Therefore, their money is scalable, their marketing is scalable. They don’t have to rely on time and energy. With a generalist however, if they’ve got a mixture of low value and medium value customers, they may not have money left over after the marketing spend to reinvest. The specialist would be able to grow faster than the generalist.

As we can see here, most businesses, when they’ve got a mix of customers, will be able to grow at an organic rate. If you want to become a high growth business, you want to transition so that you are aligned with and focused on higher value, high value and medium value customers. At DominateCon, we’re going to be going through more strategies in more detail to help you do this. This is the fundamental point I want get across, and I want you to understand that now. If you can be seen as the expert in your field, you’re going to have a high 30-day customer value, and therefore your marketing is more scalable. Therefore, you can then out-compete other people in your arena.

Little tips here. You want to be focusing your marketing effort on your highest value, repeatable customers. You want to be looking at the percentage of budgets spent on highest value customer marketing campaigns. You want to have a really clear definition of your customer avatar. This is exactly who your customer is. What problems do they have? Where are they? What do they look like? What do they read? The more you understand them, the better you can target them. The key question you want to think about is, who are the highest value and largest profit customers you can repeat and scale with? I’ll repeat that. That is going to give you a highest 30-day customer value, which allows you to scale even more. As that happens, over time, you transition into a specialist business that attracts more high-value customers and higher-value customers.

You’ve just learned two of the most fundamental and critical changes needed in your business to grow fast. At DominateCon this September, we, along with our panel of outsourcing and automation experts, will not only be explaining these concepts and methodologies in a lot more detail, we’re going to actually demonstrate and provide you with tools you can use so that by the end of the day, you will be able to actually action everything your business needs. Secure your tickets HERE today, to avoid missing out on the only UK conference to cover outsourcing and automation for business growth.

 

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About

Lucie & Aalok

Lucie & Aalok are husband and wife and co-founders of Click Convert Sell. When they first started to use Infusionsoft in their private dental practice in London (their marketing lab), back in 2012, they saw a constant growth in the following years. After lots of testing they refined and created a scalable and reusable system, a unique framework they now teach and plug in other businesses. They are all about delivering a premium experience and quality service through integrated solutions and the leverage of automation & outsourcing. Continue reading

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