Close the Sale Using- The TRUE value of a customer

I wanted to include a basic equation for determining the TRUE value of a customer. One of the most important pieces of information you can obtain from a business is the value of a customer. Why? Because if you can A) get your potential client/customer to see that your solution is an investment vs. a cost and B) that investment is less than the value they get from it YOU WIN EVERY TIME! If you can invest $1 to get $2, you would be a fool not to, right? Often times though your potential customer is only looking at the value as the average sale per person/customer. For example, if I own a sandwich shop and my average customer spends $8, most view the customers value as $8. That couldn’t be further from the true value!

I have included an example from a restaurant client of mine to show you the power of TRUE customer. Feel free to use this when determining your customers value or in meetings with potential clients to show the value of your service when compared to the TRUE value of the customers you will bring. Questions? Comment below and I will get to you ASAP.

Ex. from an actual restaurant client of mine

Average Sale per customer $12

# of visits per month (or year) 24

Sales Per Advocate Per Year $288

Ave # of people per table (2.32) $662

# of referral per customer 1

Gross sales per year $662

**PLUS the KEY**

How long does an average customer stay (retention) 5yrs

Gross sales over life $3310

Gross sales for total referrals $3310

Total value (3310+3310) $6620

Ad spend: the goal is to get a customer in the door FOR FREE (i.e. in this example $12) because we know that the average will spend much more. Basic Advertising 101 but most business owners just don’t realize.

Perfect Real World Example

Did you know that McDonald’s spends $1.20 in advertising per customer and the average customer only spends $1.13. Most small business would look at the “ROI” and cut advertising. We would not have McDonald’s had they followed that logic.