Lower Your Cost Per Client
Every client costs you money. When someone is seated in the chair across from you, it cost you money to put them in that seat. Of course, you hope that the money it cost you to put them there is less than what you are earning from them!
When I say that clients cost you money, I’m referring to how much time, effort, and money you had to put in to get them into that seat. Take a look at your marketing and your networking and your sales activities and figure out your overall costs and divide that by the number of customers you have. That is what it is costing you to put a client in the seat across from you. (Okay, it’s just a rough estimate and some MBA somewhere in the world will point out that there are other considerations as well, but let’s just stick with this number as a rough guideline).
Let’s use some really approximate numbers to give you an example of what we’re talking about. [LOUD AND CLEAR DISCLAIMER: Of course I know the following numbers don't represent real prices or rates, they're just an example to show you how I've calculated the cost per client].
Let’s say that you advertise in the phonebook for $1000/year and you advertise in a newspaper for $6000/year and you spend 48 hours of billable time (at $100/hour) in networking events every year. So: $1000 + $6000 + $4800 = $11800. Now, if you have 10 clients because of that effort, it cost you ($11800 divided by 10) $1180 per client to attract them to your business and turn them into clients.
So, if a coach wants to get 2 more clients, they could expect to pay an additional $2360 ($1180 x 2). But you don’t run a charity, you run a business, so profitability is a consideration. To that end, you need to think about ways of getting more clients into the chair across from you without spending that amount.
Here are some ideas:
- Revisit your marketing expenses. Is that phonebook ad really working for you? Do you think it would impact your business by getting a smaller ad?
- Ask your clients how they heard of you. What they tell you will give you a hint as to what marketing works for you and what doesn’t. (Note: they may have heard about you in several different ways and only mention one, so don’t act rashly. Ask everyone.)
- Spend more on targeted marketing. Yes, spending more seems to run counter to the above tip but the right message to the right market in the right media will cost more but deliver more customers.
- Ask for referrals. Referrals are an amazing way to generate more business because they cost nothing but a moment of your time to ask. Really really successful and profitable coaches who never need to advertise get their business this way. The more you ask for referrals, the less it will cost you per client.
@contemporaryva on Twitter. Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!
Related Articles:
- Getting Referrals
- Do You Really Need a Website?
- Choice Magazine
- Data Storage and Back-up for Dummies
- Time Management Tools
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment