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3 Important Numbers Every Business Owner Needs To Know

Written by Carl Taylor on 25/04/2014 1:42:00 PM 0 Comment


If you’re a business owner or a Marketing Manager, there are three key numbers you need to know and be tracking when it comes to marketing and growing your business. These include…

(1). Allowable Acquisition Cost
Your allowable acquisition cost is how much you can afford to spend to buy a customer. That’s what marketing is, my definition of great marketing is…“The act of buying customers at the lowest price for the highest return.”

So marketing is the act of buying customers and the way you ensure you are buying them at the lowest price starts first by understanding how much you can spend on marketing. How could you spend $1,000+ on one marketing activity and know that you can keep spending that every single day?

Your allowable acquisition cost is how much you can invest to acquire a customer and we break it down into 2 key numbers:

(1). Allowable Acquisition Cost per Lead
(2). Allowable Acquisition Cost per Customer

For example, if you know that you can afford to invest $1,000 per customer, and that to get 1 customer you need 50 leads, it would mean your Allowable Acquisition Cost per customer is $1,000 and your allowable acquisition cost per lead is $20 (that’s $1,000 / 50). So now when you’re looking to invest in your marketing, you just need to decide if this will fall under your allowable acquisition cost.

(2). Actual Acquisition Cost
So you’ve now invested in some marketing, maybe direct mail, maybe SEO, maybe a TV or radio advert. You have to ensure you’re tracking your leads and where they came from because you need to check what your Actual Acquisition Cost is and did it come under your Allowable Acquisition Cost.

For example, if you invested $1,000 as your Allowable Acquisition Cost and you received 100 leads, then your Actual Acquisition Cost was $10 per lead ($1,000 / 100).

The great thing about being a Bartercard member is that there are numerous ways to reduce the cash costs of your marketing campaigns and bring down your acquisition costs.

(3). Your Clients Lifetime Value
The third number that you need to be tracking is the lifetime value of a client. Generally, your real profits generally come on your 2nd, 3rd or even 4th sale rather than on your 1st sale. If your business currently doesn’t get more than 1 transaction out of a client, in other words they only come and buy once, then look at how you could add additional transactions. How could you combine and grow what you do, to allow you to invite clients back?

This understanding of Lifetime value is what allows the big industry players to spend large amounts on their marketing campaigns that appear to only be about “Brand Awareness” rather than direct response marketing.

So what is the lifetime value of your clients? And how can you extend your lifetime value? You can use the Bartercard network to help with running client appreciation events, sending thank you gifts to clients, and marketing to existing clients inviting them to refer and come back. If you’re a business owner or a Marketing Manager, you’ve got to be using these numbers, and tracking these numbers, and working to improve them all the time.

For some great video tips on getting the most out of your marketing by using Bartercard click here.

Carl Taylor is the Author of #1 Business Book Red Means Go! and founder of the Business Builders Academy where they help consultants and professional service providers who are struggling to clone themselves in a business that relies so heavily on their expertise. You can get more free tips and training at



Topics: Business Owners, 3 Steps, Growing your business, Cost per sale, Cost per lead

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