Are you flushing marketing dollars down the toilet? The biggest mistake in small business marketing is forgetting the phrase “lifetime value of a client.” Understanding this strategy can leave your cheaper competition in the dust.
Most small business owners see ad and marketing spends as a make it or break it the first time proposition. That is a big miscalculation.
“If this were dating it would be like asking for marriage on the first date,” says author Jim Kaspari. “We’re throwing thousands of dollars down the toilet with this mistake.”
The goal of ads and marketing used to be to get paying clients and to make sales right away. That makes perfect sense, but it simply doesn’t work anymore. Marketers need to be thinking about the long-term.
“Many of us are using our marketing time, energy, creativity and brilliant brains doing pay per click online advertising and trying to get over 100% return on investment with the first transaction,” says Kaspari. “That’s just crazy.”
Kaspari is a long-term thinker. He worked at Genentech, Inc. for 20 years as a chemical engineer, automation and systems analyst, and training manager. By investing well and helping start businesses as a moonlighting side hustle while working, he was able to retire a millionaire at age 44.
“We all know that much of marketing has gone online, but why is it so challenging and time consuming these days and what can you do about it?” asks Kaspari.
That is a driving question for Kaspari when he works with clients. Kaspari has been a business coach and consultant with entrepreneurial business owners and startups since 2005 and has coached over 500 clients in nine countries.
Kaspari, CEO of PEAK Business Coaching, is the author of PEAK Profits, 47 Latest SEO Secrets to Get More Traffic from Google, PEAK Profits Business Journal and Olympic Gold Medalist Quotes. He has spoken on stages across the US and in Australia on small business marketing.
Kaspari advises his audiences to think about and quickly calculate the lifetime valuation of your average client.
“Don’t get hung up on the details,” says Kaspari. “For example, a hairstylist might have an average client spend of $75 per day, they come in every month and last two years. That comes out to $1,800.”
This knowledge can lead to different behavior. “Instead of maxing out at $5 per lead (20% conversion, 300% ROI to cover other costs), you can easily spend $10-$15 per lead or more and make out like a bandit,” says Kaspari. “This strategy leaves your cheaper competition in the dust.”
The other key is realizing that we aren’t looking for a sale with our ads. People don’t want to be sold to anymore. So, what’s our new goal? To make friends. Get to know each other…draw them in with an irresistible gift and then help them solve problems and make their life better. This allows them to get to know, like and trust us.
“Interview your clients until you know what is irresistible to them,” says Kaspari. “Create an opt-in for your website or lead page. Set up an autoresponder email series that gives tremendous, relevant value, help, and great ideas and resources. After five to seven of these emails, you’re safe to ask if you can be of further help to them (sell something). Then it’s lather, rinse and repeat.”
Catch up on my current posts along with industry articles