Most companies aren’t good when it comes to figuring marketing budgets, and use a variety of figures, whether it’s a set amount per month, a set percentage of sales, or just a number they decide on when a salesperson calls to sell advertising.

So if you could have an unlimited budget, how big could you grow your business?

What if you could create an unlimited number of new leads and customers in your business? Well, you can – if you focus on your “Acquisition Cost” and the “Lifetime Value” of your customers.

Acquisition Cost is simply the cost of “buying” your current customer. If you’ve put $1000 into advertising and had 100 phone calls, you’re paying $10 for each of your leads. If only 10 of those leads “convert”, or make a purchase, you’re paying $100 to capture each sale.

Now, what’s this customer really worth?

In most retail businesses, a “bought” customer doesn’t begin to provide breakeven or profitable revenues until the second, third or even fourth purchase.

However, the value of every purchase after those initial buys is just like gold for your business.

This is where the idea of the “Lifetime Value” of your customers is so important.

Simply put, “Lifetime Value” is the amount of money your average customer will spend with you over a buying lifetime.

The idea of the unlimited marketing budget is to get you thinking in terms of your marketing efforts as investments rather than expenses.

And with any investment, you are always looking for a return. It also forces you to look at your advertising and marketing efforts in a whole new way.

Why toss thousands of dollars out your door looking to build a brand image when you could spend those dollars more tactically to actually increase your bottom line – and build a brand as you’re doing it by buying customers?

All the best,
Brad Sugars