A breakdown of how to calculate what you should actually spend to acquire a customer. The video walks through lead costs, conversion rates, and lifetime value to show why most businesses overspend on marketing.
I know that if I spend money in marketing, in Facebook ads to drive traffic, or we pay door to door canvassers, I'm going to get a lead is going to cost me $17. If the conversion rate of that lead is 10%, meaning I got to spend $170 to get one convertible lead, that means my client acquisition cost is 170 bucks. Well, I know that the average client is going to be about $150 a quarter, depending on what market you're in. And the lifetime value of that customer is going to be so. So annual value is about 600. Right? My acquisition cost was 170 based on my leads. Based on my conversion, my my annual value contract premium for that customer be $600. Because 150 times 4 at the cost of 170.
