I was listening to a podcast from The McMethod Email Marketing Podcast and the discussion was about the lifetime value of your customer. The guest speaker was Brian Kurtz who is a Direct Response Marketer using mainly offline marketing direct mail. A discussion then took place about the mindset of internet marketers and how most people when they enter Internet marketing do not think Long term about building a business but rather fall into the trap that they just have to sell a few things and their paypal account will start filling up with money. There is also the thought that there is a quick path to success and anyone can become an Internet marketer and make lots of money and live the 4 hour work week.There is not a lot of emphasis on building a long term business with returning customers, referral marketing and establishing the lifetime value of a customer. Most Internet marketers throw up an free or low cost ebook or report or do a launch of a product. Sometimes they can mahe a 5 figure income with one product but what happens after the product stops selling? Ideally on should have a sales funnel that drives the customer through the frontend product and then to an upsell or tow and eventually to a high end product. The business system should also allow for ongoing products that can generate regular income. It is important to establish a relationship with your customers so that they trust the internet marketer and will continue to buy.
Perhaps the best way to use your lifetime customer value is when calculating your advertising costs. So you may spend $50 to acquire your customer which would be bad if the lifetime value of this customer was $47 but Ok if the lifetime value was $200 or higher.
There are some Internet marketing Systems in place that have done their research and know the metrics of their customers. These systems can estimate the lifetime value of their customers and know how much of a budget they will need to make a positive return. This has been achieved through testing and tweaking every part of their sales funnel. Two such systems are Dean Hollands Ipro System and Matt Lloyds MOBE. Both these system offer a licensing option which allows you to promote the system and Dean and Matts sales team will follow up with the prospects you send and get you more sales. So instead of you building your own sales system with a front end offer, upsells downsells and writing sales pages you get the priviledge of using a fully tested and optimised system for a small cost.If you would like to take a short cut in internet marketing and use a proven sales system that is converting for 1000′s of people just like you then click here to watch Deans Video or Matt Lloyds Sales page Here
Below I have placed a infographic of Starbucks Customer Lifetime Value
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Source: How To Calculate Lifetime Value