How to Get More Customers for CHEAP!

Hey everyone, today we're going to be talking about what type of service in your home service business should you be actually advertising for? Most of us we have several different services that we can offer. We do big projects, we might do some recurring services. We have different types of services that we offer at different times of the year. So the question is what service should I be spending my advertising on? Because the worst thing to do is try to have like, like 10 call to actions and like 10 different services that you're trying to offer inside of your advertising. Whether that be Facebook ads, Google Ads, whether it be a flyer or a door hanger. Trying to sell someone on 20 different services that you can do around their property is usually not going to convert very well. So the question is where do I spend my money and what is the call to action? What is the service I should be actually pitching? So I want to propose this idea that, that really what determines where you spend your money is the one that is going to get the best lifetime value to CAC ratio. Alright? Lifetime value is the amount of profit that I'm going to make from this customer. Gross profit from the customer, their entire lifespan. Cac, customer acquisition cost. What do I have to spend to get one new customer? I on advertising. That's how we're going to define these two terms. And this is what we want to look at if we have a $10,000 project. And again I'm not making this point of you should do projects versus you should do smaller jobs. That's not the point I'm making. The point I'm making is where should I be spending my marketing dollars? Because I still want this $10,000 project but I also want to make sure that I spend my advertising dollars in an efficient way as possible. And, and so now let's look at another option. Now this $10,000 is going to be the lifetime value of the customer because it's a one time project. I'm not going to be coming back to their property again. So that $10,000 is ultimately their entire lifetime value. Now let's look at a smaller product, a recurring job, for example. And let's say that we do the job 40 times in the year and it's $50 per service, whatever service you're doing on a recurring basis. So that's $2,000 per year. Let's assume that we have a 50% churn rate on our recurring services and therefore we are going to keep the customer for two years. Well, if we have $2,000 per year and we keep them for two years. That would then mean that the lifetime value of the customer is equal to $4,000. And this is for a recurring.

Job. Okay, this could be mowing if you're landscaping. This could be pressure washing if you are in pressure washing. Any service that you can have as smaller. This is really what we're focused on now, even if it's not recurring. It could also just be a second service because let's just say you don't do any recurring work. Let's just say you have two different types of projects and you're like, what service am I supposed to try to advertise? And which one will I get the most bang for my buck? So, so we're comparing two different types of services, whether it be recurring and secondary service versus our big project. So over here, we got our second lifetime value. So this customer over here, I am going to get $4,000 from them in their lifespan. This could be four $1,000 jobs over the course of a couple years. Or this could be 100 different services at $40 per service. It doesn't matter. These are just simply the lifetime values of Project 1 versus Project 2. Now, what we want to look at though, is what are we having to spend in terms of customer acquisition costs to get these customers? So if we look at the customer acquisition cost over here, let's assume that we have to spend $400 on customer acquisition costs to get this project. Well, if we're going to spend $400 on customer acquisition costs and get this one big product for $10,000, that assumes a 25 to 1 LTV to CAC ratio, which means I am able to get 25 times what I spend on customer acquisition cost in the lifespan of the customer. Now, let's compare that to service number two in terms of recurring or just a secondary service that you could potentially be advertising. Let's say assume over here. Hey, this one's more frequently needed by customers. More customers are in the market for this service. Okay, I only have to spend $100 for customer acquisition cost. Okay, now the reason I'm talking about this because most people were like, well, if I hit $10,000 gross profit from this massive project and spend $400 on customer acquisition cost, I made like $9,600. Awesome. And it is awesome. However, when we run the math over here, we actually now have a 40.

To 1 ratio when it comes to lifetime value to our customer acquisition cost, which means I'm able to have 40x the amount I spend on acquiring the customer. I'M able to get in their lifespan. So this allows you to be able to grow the business much faster and without going into debt because you're getting your money out from. You're getting more cash, more profit from each and every single customer. And the advertising that you're doing is much more efficient from simply a metric standpoint. So this is your lifetime value to CAC ratio. Very important to measure because this is what I believe you can do. And I heard a mentor of mine say this, and I think it's a brilliant idea for all of us to have multiple services. And that is, it's not that I. I want to avoid the $10,000 project. By no means. I want the $9,600 in gross profit. And over here, like, well, this is only $3,900 that I'm making over the course of the lifetime value of the customer. You're right. And that's why a lot of times people will say, you know, big projects are the way to go when it comes to your landscaping or hardscaping or construction businesses like go after big projects. And they're right because you will make more profit much faster because you get all 10,000 of this you in one go. And they're right in terms of the gross profit. But here's the thing. If I can get a customer for $100 and get in the door with them Instead of spending $400, what I want to do is pour my marketing dollars on whatever service at any period of time is going to have the lowest or, sorry, the highest lifetime value to CAC ratio, which in this case would be service number two or your recurring service. I'm going to pour as much money into that advertising there. And then what I'm going to do is try to grease the gears. I'm trying to grease the gears from getting these customers to buy these $10,000 projects. For example, if I'm going to be doing lawn care and landscaping, I am going to focus all my marketing attention and advertising on mowing. Why? Because I can get a customer for very cheap compared to going after massive projects. And then what I'm going to do once I get them as a customer is I'm going to grease the gears of converting that smaller lifetime value customer into the larger projects. I'm not against larger projects, but what I see people doing is spending gobs of money on all sorts of different types of advertising and they're going after the big jobs, when in reality, if you get the smaller jobs, when you get the recurring jobs and Then upsell those customers into these large projects which without even needing to have that customer acquisition cost. And that's why it's so important whether to use Copilot or any sort of software to upsell your existing customers. In Copilot, when you're at the property, you can literally just make an email or text template and tap one button and upsell them a large project. So what am I going to do? Instead of spending $400 and getting one customer, I'm gonna spend that $400 over here and that $400 is gonna get me four customers. And now instead of making $10,000, I, I take $400, spend $100 per customer. I'm going to get four customers at $4,000 each, which means I'm going to get $16,000 instead of $10,000 on the same amount of money being spent. So Instead of spending $400 and getting one customer, I'm going to spend that $400 and get four customers because this has a better lifetime value to CAC ratio. Alright? I'm going to spend all my marketing dollars on whatever service at whatever time of year, different services based upon their demand. It's going to change. But for me, in my lawn care landscaping business, I know most people need mowing. I can get a customer much cheaper. I'm then going to stack as much of my marketing dollars during peak season for mowing into this service and try to advertise and get customers as many as I possibly can. And then I'm going to upsell them using one click, estimate emails, using text blasts, using whatever means necessary. I'm ever going to go knock on their door and, and ask them if they want the larger project. I want to be able to get this project and double more than double, triple their lifetime value by upselling them these larger jobs. But I don't want to spend four times as much on my marketing to get them on the up front. So when you're trying to look at all the different services you could offer in your advertising, look at the one that has the greatest lifetime value to CAC ratio, not just the greatest profit in the short term, but which one is going to have the best return on your marketing dollars. And then make sure you have systems to grease the gears towards every other type of service that you can offer. That's a larger project size that potentially has a lower lifetime value to CAC ratio.