Skill testing question….
If COMPANY A is able to generate leads for $3 a piece and COMPANY B has to spend $10 to generate a lead…
Which company is going to be more profitable?
(insert Jeopardy song here… I’ll wait…)
Well…?
The answer is.
It depends.
You see WAAAAY too many people focus, fixate, and obsess on getting cheap leads and cheap clicks (ie CPC or cost per click).
“Cheap leads man… I gotta get me some of them cheap leads”
But the real indicator of future profitability has more to do with the LTV (or lifetime value) of a customer.
This is because if COMPANY A can generate $3 leads but the value of their customers over a lifetime is only $50 each…
They’re going to lose all day every day to COMPANY B who is spending $10 per lead but generating $5000 (or $50,000) per customer.
There’s an expression I love that goes “whoever can pay the most to acquire a customer wins” Preach it Mr. Kennedy!
Fun Fact #1: I paired this principle with the “outspend your competition” principle that I first heard from 7 figure consultant Alan Weiss to rapidly grow my first 6 figure biz years ago!
Fun Fact #2: Not surprisingly, the other strategy I used to gain rapid and massive market share was Facebook Ads. If you’re looking for an expert to run your campaigns for you, you can click here to apply: https://www.adamerhart.com/facebook-advertising-private-client-application/)
So here’s how to win at marketing:
- Raise your prices 10-20% (or add an extra level of service you can charge 100-1000% more for to provide a LOT more value to your diehard fans)
- Put that revenue directly back into growing your business and acquiring new (higher paying) customers
- Wash, rinse, repeat your way to success
Have a great week!
