Calculating Value: What Is A New Customer Or Market Worth To Your Industrial Or Manufacturing Business?
What is the value of a new customer to your business? In the industrial and manufacturing sectors it can be huge. It is common to develop lasting relationships based on repeat business. Depending on your industry, a single new customer can easily account for anywhere between tens of thousands and hundreds of thousands in gross sales over the lifetime of the relationship. With these numbers in mind, how you find these new customers becomes an important question.
Everyone loves a referral, and it can certainly simplify the process, however, a new customer is often the result of a lengthy sales operation that can last months or even years. In these cases, a qualified lead can often be valued at well over $1000, and an actual customer may be significantly higher than that.
Another option is to enter new markets altogether. A new vertical or geographic market can open the door to additional customers, and if done correctly, can be a goldmine. However, this can be a costly undertaking and carries a certain amount of risk.
Given the cost and risks associated with finding new customers and markets, it makes sense to use the tools available to improve efficiencies. Today’s marketing technology provides companies with an amazing amount of information, allowing businesses to make the right decisions in a fraction of the time and at a fraction of the cost of traditional methods.
Consider this: If a system using marketing technology generated a customer with an average lifetime value (LTV) of $250,000, then it would make perfect sense to invest $1000 a month to get one new customer, correct? It seems like a no-brainer.
The numbers are important, and we encourage you to do your own calculations if you want. The reality is that finding new customers and entering new markets is a challenging and costly process. Automated marketing technology can help with both, saving you time and money, making it a worthwhile investment.
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About Fred Yee
Fred Yee is the founder and CEO of ActiveConversion, a company that makes online marketing work for industrial companies. Fred was voted as one of the 40 Most Inspiring Leaders in Sales Lead Management in 2017, and his work with ActiveConversion has helped hundreds of businesses succeed online. ActiveConversion is Fred’s third successful company, and he continues to explore the possibilities of technology in industrial sales and marketing.