When it’s time to talk marketing goals, we frequently hear business owners talk in terms of outcomes, getting right to revenue: “We need to hit $20 million in revenue this year” or something along these lines. But what we rarely hear is the right approach, budget-wise, to how we're going to hit those goals. Clients will typically use some percentage of total revenue that they think "feels right", or look at dollars in versus dollars back from last year and do that every year.
But let's say you're looking to make a significant revenue jump, or you just want to get savvier about how much to invest; how do you develop an optimal marketing budget?
Three words: Customer Lifetime Value.
By focusing on the lifetime value of a customer rather than annual revenue or “break even” points, businesses can develop a truer understanding of where their marketing budget needs to be.
With this handy download, you'll learn how to calculate lifetime value, and determine how much revenue from each ideal or target client profile you should be allocating to acquiring each ideal client.
What You'll Find Inside:
- Customer lifetime value is the measurement of profit your business makes from a given new customer. This value allows businesses to understand, among other things, how much it can spend to acquire each new customer.
- Calculations and a pre-formatting Excel calculator for determining Customer Lifetime Value.
- Additional questions and considerations to get an in-depth look at the numbers.
Ready to stop guessing and start budgeting right?