The most valuable asset in any business is…
Its Customers
I can’t overstate this enough!
One of the biggest expenses a business has will always be to get new customers. Once they have their customers, they should want to keep them satisfied and happy by continuing to give them good products and good value for their money. Plus, it’s also very important to keep in touch with their customers on a regular basis with special offers, tips and help.
Most businesses acquire their customers from advertising.
Sadly however, most businesses also fail to recognize the true value of their customers.
Treating your customers like they are the most important thing to your business is common sense. A lot of business owners don’t realize that it’s just as important to keep their current customers happy as it is to get new customers.
How To Grow A Business
There are only three ways for a business to increase its growth. They are…
- Increase the number of customers it already has
- Increase the dollar amount of the customer’s transaction
- Increase the frequency of the customer’s transaction
For example, if a particular business has 1,000 customers, and each customer buys $100 worth of product per year, then in order to increase their business 10%, they need to either:
- Increase their number of customers to 1,100
- Increase the dollar amount of the transaction to $110
- Increase the frequency to every 11 months
This is very important to understand and once you understand this you can easily explain it to your potential joint venture sites.
Gold Mining
The sale a business initially makes to a customer is known as a “front-end” sale and the product that is sold after the initial sale to the same customer is cleverly called a “back-end” sale.
Back-end sales simply means, selling additional products to your existing customers.
Few businesses know that they are actually sitting on a gold mine and they simply don’t take advantage of it. The gold mine is…
Their Own Customer List
It is just as valuable as gold because, when it comes to marketing, selling to your existing customers is a lot easier than selling to complete strangers.
The Golden Rule
So, once a business has made an initial sale to its customer, it becomes much easier to sell to him or her again in the future if the business treated the customer nicely and offered a superior product and excellent service.
These customers now know and trust the business and won’t hesitate to buy from this business again in the future.
You should always treat your customers with respect. Remember the Golden Rule.
“Always Treat Others The Way You’d Like To Be Treated”
Profitable Back-Ends
It’s very important for you to realize that there’s a lot of profit in the back-end sales. This is where a business really makes the big bucks.
I especially want you to grasp this important concept because this is why so many sites on the Internet lose money and quickly go out of business.
There are many Internet businesses that don’t make any money on the front-end. Some even lose money on the front-end but they more than make up for it on the back-end.
That’s one reason…
A Business Should Not Mind Giving Up Most, If Not All
Of Their Profit On The Front-End…
If They Can Get A New Customer Without Expense!
They can really make much more money on the back-end because once the customer trusts the business and knows that they will not get ripped off, they will come back to that business time and time again.
Difference In Response
When a business e-mails their own customer list they will get a much higher response than to any other list.
As I explained earlier, if a business would rent a “cold list” (meaning a list of prospects that have not bought from this business before), and mail a “great” sales letter to these prospects, that business would probably only get about 1-3% response.
However, if an offer (even if from another business) was “introduced” by a business to its own customers, the response could easily jump to 10-20% or even more.
The reason there is such a difference in response is simply because the customers know and trust the person or business doing the introduction.
That’s why joint ventures work so well and why they are so profitable.
It doesn’t take much to see that you can…
Literally Make A Fortune By Finding And Introducing
Web Sites To Profitable Joint Venture Win/Win Deals!
Lifetime Value Of A Customer
The value of a customer – like any other good investment – can grow with time and create what’s called a “residual income” for the business. That’s what is meant by “life-time value of a customer”
The lifetime value of your customer is simply how much money he or she spends during the entire time with your business.
Most business owners don’t have a clue as to what that figure is – even though it’s very important.
Calculating Lifetime Value
Basically here’s how you figure it out.
Let’s say you sell a product or service for $100. Your markup on that product is 50%, which means that your net profit from the customer is $50.
Now the question is, how much will that customer spend at your business over the time he or she stays with you. Of course this could be a one-time purchase or the customer could continue to buy from you over many years. Each customer would be different.
We’re not really concerned with each individual customer, but rather with an average of many customers.
Let’s say you as a business owner have kept track of your sales and your customers habits and you know from past experience that your average customer will spend $800 over the next 5 years with your business. And if your product markup is 50%, the net profit would be $400 from each customer over their lifetime (50% of $800).
Now, if each customer on the average is worth $400 to you over the next 5 years, you could spend close to that amount of money to acquire a new customer and still come out ahead.
Of course it would be kind of silly to spend close to $400 (especially up-front) to acquire a customer if it would only be a break-even for you. Wouldn’t it?
But you could easily spend $25 on advertising, sales calls etc. to get a new customer if that customer would be worth $400 to you over the next 5 years.
So If you acquired 1,000 new customers at a cost of $25 each or $25,000 (1,000 x $25) that would return $400,000 (1,000 x $400), you would make a nice profit of $375,000 ($400,000 – $25,000) over the next 5 years, or $75,000 ($375,000 divided by 5) per year. This would definitely be worth it.
Getting Customers For Free
But, what if I could show you how a business owner could acquire customers virtually for…
Free
by doing joint ventures on the Internet using e-mail?
Bingo!
This is exactly what this is all about, and why this is so exciting and so very profitable for everyone involved, including you!
These kinds of joint ventures can be done with most any type of business, whether a product or a service. Deals can be made with golfing sites, information sites, fishing equipment sites, etc., etc.
Good Relationships
When you do your searching on the Internet for Web sites to do potential joint ventures with, you should be looking for Web sites that seem to have a good, strong relationship with their customers to endorse your product.
The stronger the relationship the stronger the endorsement becomes and consequently a good endorsement to a strong bonded customer list will generate great profits.