What’s Your Customer Worth?
Topics: Marketing, success, profitability, growth
Suppose you own a bakery. Every day you hit the floor running at 4 am to bake pastries, desserts and cookies. Your pastries and desserts are the best tasting in town.
Each customer walks in, buys one or two of your delectable goodies, raves how good they taste and drops down a $5 bill. It takes A LOT of customers coming to your bakery to make a good living with this business model.
You’re talented. You’re good at what you do. You work hard.
But here lies several fundamental flaws in your business that can turn your passion into a prison. First, you have to get up before the sun to bake all the goods, so they are ready for morning coffee breaks by 7 am.
Second, you only get $5-$10 per sale on the average. It takes a lot of work and lots of customers to make a successful business with this model. This business model requires massive quantity of customers each year to enjoy a successful business, and that requires hiring a team of employees.
Take an author who has written a book and plans to make a nice income from his book sales. His book sells for $20. Like our baker, it will take A LOT of book sales to generate a nice income.
Unless they have something bigger to sell on the back-end, the baker and author are working much too hard for too little income.
Now, suppose our baker starts selling wedding cakes in addition to pastries and desserts. She runs promotions growing her business with high-end wedding cakes. She has the talent and the training for this, and she has all the equipment.
She sells her first wedding cake for $250. Then another. It doesn’t take many wedding cakes sales to transform her business.
She hires an assistant to bake the pastries and desserts, and she now focuses on high- end wedding cakes. Her business doubles or triples with this new business model with less effort. A customer is now worth $250 to her, not $5.
Back to our author. . .He now adds a one day workshop teaching in more depth the information in his book. Suddenly each customer is now worth $200 to him, instead of $20.
Soon our author turns his one-day workshop into a weekend seminar and starts charging $1295. What excites you more– having a client worth $20 to you, or having a client worth $1295 to you - and more?
What is the higher-end product or service you can offer your customer? By shifting your focus to a higher- end business model, you can dramatically increase your business revenues. Not only will you enjoy more income, you will also enjoy more time and peace of mind.
As a business strategy expert with 20 years of extensive work for Tony Robbins, Stephen Covey, John Gray, and Mark Victor Hansen, Carolyn now coaches ordinary people to extraordinary results. Explode your business! Get Carolyn’s FREE Explode your Biz Quiz here: www.ExplodeYourSmallbiz.com.
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