What is a dream list? Missed part one and part two? You can read part one and part two here! This time, we are talking about why your average customer value is so important.

Basically, every business has an average customer value. Even if your customers are paying you different amounts, if you add up the entire amount that they are paying you and divide it by the number of customers you have, you have got your average customer value. As an example, if a business has three customers who are paying them a combined total of £3,000 a month, then their average customer value per month would be £1,000.

So, why does this matter? It’s only by going through this process, that you can work out what you can afford to spend on acquiring new customers. Given that this is what the dream list is all about, it’s worth working this out.

The question is, how much are you willing to spend on acquiring a new customer? The main reason why working out your average customer value is so important, is that it makes a huge difference when it comes to the amount of money you can spend on marketing to your prospects.

For example, let’s say that each of your customers is worth £1,000 a month. So, if you get a new customer, they are going to be worth that to you every single month. How much would you be prepared to spend on turning a prospect into a customer?

If you work out that on average, you convert one out of every ten prospects that you can market to into a paying customer, and that one customer is going to be worth £1,000 to you each month, then even if you spend £99 on each of those ten prospects, you wouldn’t be out of pocket if even one came on board. Result!

The reality is if your organisation is the kind where you can retain customers for a decent amount of time, then spending £99 per prospect isn’t a very big investment, if you know that you’ll convert one out of every ten into customers.

In effect, by spending £990 on marketing, you’ll have brought in £12,000 of new income per year. When you think about it like that, it may be your company would benefit massively from a small number of customers. It is worth spending the time, energy and money acquiring that customer.

Now, you need a few ideas to contact your customer avatar. We will cover this is part four, so keep posted for it!


Did you find this information useful? Download or print out our PDF. It also includes part one and two – it may come in handy! What is a Dream List – Part One, Two and Three PDF

You can also read more about our social media and marketing hints & tips on our blog section here.

Pick up the phone and call our helpful team on 01843 572600 if you would like any advice on your marketing. We are always happy to help!

You must be logged in to post a comment.