How Much Should You Invest to Get One Customer?

Updated: Mar 6, 2020


How much is a customer worth?

Customer Lifetime Value (CLV) is how much a customer is worth to your business over a lifetime. If you don’t know what a customer is worth in your business, you won’t know how much money to invest to obtain a customer! Lets take a car dealership, for example. Imagine that the average value of a customer (over their entire lifetime) is $200,000, and you spend roughly $10,000 on marketing, per customer. Over a lifetime that is a net profit of $190,000!

So many people are afraid of INVESTING in getting new customers/clients in their business. They're afraid to purchase Google/Facebook/Instagram ads, an impressive website (creating a space for your customer to experience your brand to and be impressed or not impressed), tickets to networking events, new education, etc. Most of the time you have to invest to receive a customer. Once you have the customer, you invest to retain the customer.

(Money received from your average customer over a lifetime) - (Money spent to obtain average customer, over a lifetime) = Customer Lifetime Value (CLV)

Calculate the Customer Lifetime Value of your current/future customers today, and use that number to help you plan how much you should be spending on getting customers.

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