VALUE OF A CLIENT
Lifetime Value Of
Joe Polish is the founder of Genius Network® and GeniusX®,
President of Piranha Marketing Inc., and Co-Founder of
10XTalk.com and ILoveMarketing.com, two highly popular
free podcasts on iTunes. Joe’s marketing expertise has been
utilized to build thousands of businesses and has generated
hundreds of millions of dollars for his clients. To grow your
business with free training from Joe on Business Mindset
Mastery and get Joe’s new “Anatomy of a Successful Business”
Info-Graphic please visit: www.GeniusNetwork.com/Value
his is likely one of the most
will ever learn in your entire
Have you ever sat down and
tried to figure out what each Client who
does business with you is worth over the
lifetime of your business relationship?
If you’re like most people, you might
have thought about it once or twice but
you never actually sat down and put a
pencil to the paper to figure out exactly
what each client is worth to you over the
lifetime of your relationship.
Well, I’m going to show you a simple
way to do this, and it’s probably going
to become apparent to you that each
Client who enters your “funnel” is worth
a lot of money-if you treat them properly!
So, how can you easily calculate what an
average client is worth to you over the
course of a year?
Easy, all you do is take your yearly net
profit-NOT your yearly gross profit, and
you divide it by the number of Clients
you did business with over the last year.
So for example, if you netted $360,000
in income over the past year and you
did business with 1500 Clients over the
course of that year-the net value of each
Client is $360,000 divided by 1500 or
$240 in profit for every Client who enters
OK, you’re probably saying to yourself-
“That’s nice to know, but what does it
do for me?”
Just hold onto your seats for one minute
because I’m going to show you exactly
how you can use this principle to
skyrocket your business...
Getting back to the example, we now
know that every new client is worth $240
in profit to you, right?
So how much are you willing to spend
to attract new Clients to your business?
Now, when I ask that question I hear a
lot of answers like this - “I don’t have any
extra money to put into the marketing
budget” or “sending a direct mail letter
is too expensive and it doesn’t work
anymore” or “I just can’t get Facebook
or Google AdWords to be profitable,” or
“all my Clients are by referral or word-of-
Unfortunately, most who say these types
of things are completely missing the
We now know we can spend up to $240
per client without losing money. I’m
not suggesting that you must spend
$240 to get a client, but I would do it all
day long and be as happy as a pig in
mud.. (By the way, do pigs really enjoy
mud? I mean it’s just an expression, but
I’ve always wondered.)
Anyway, back to the subject at hand...
I would certainly be willing to spend
$240 per client in marketing costs to get
a new client in my funnel.
By the way, it sometimes costs me more
than $240 to get a new Client through