Monday, May 26, 2008

How much is a customer worth?

Like everything else, it depends.

But to help you sort out the variables, I have some examples.

Fast Food Restaurant that serves breakfast, lunch and dinner.

Odds are that they have regular customers at the drive-tru every morning spending 4 bucks a day.

Perhaps they only visit 3 days a week. There's $12 bucks a week.
Let's say they do this 9 months each year. 39 weeks times $12 = $468.00

Do this for just 3 years and we are up to $1404.

Let's say they grab dinner for the family twice a month at $25 bucks, or $50 a month times 36 months and we have another $1800 over three years.

Together that's over $3200.

And these are typical but conservative figures.


$10,000 for a 20 year roof.
Three neighbors also get bids when they see the quality work being done. One of them buys now, another buys in a couple of years.

Average cost was $10,000 or $30,000 total.

Coffee Shop.

Another one of those small but frequent purchases.
5 bucks times 5 days, plus bringing a friend a couple days a week and perhaps another visit with friends over the weekend and that 1 customer can be worth 50 bucks a week times 50 weeks and you've got a new customer value of $2500 per year!

Then let's say this customer refers 4 friends during that first year.
Now by reaching that first customer and earning $2500 in year one, you are now earning an additional $2500 from his 4 friends for a total of $12,500 in year two!

This is how you should measure the true value of a customer!

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