Getting More Customers: The Least Profitable Way to Grow Your Business
Let’s think about this from a mathematical standpoint. If you have 1,000 customers and you make $50 per sale, then you’ve made $50,000, right?
So if we want to get more money (sounds like a plan), we could simply double the amount of customers from 1,000 to 2,000 so we have 2,000 customers each making us $50 per sale, making us $100,000.
Duh, right? That’s pretty easy to figure out and this is where most people focus.
But hereʼs the problem.
This is the least profitable way to grow your business believe it or not, and the reason why is because of customer acquisition costs. It costs money to make that first sale, doesn’t it? There are a few exceptions where businesses are 100% referral based, but for the most part you are paying to get that customer.
You have to run ads on Google or Facebook.
Or you have to write direct mail campaigns.
Maybe you have to give away all kinds of free content just to bribe people to come to your website and give you their email address.
It’s the hardest sale to make because youʼve got to work your ass off to win the buyerʼs trust.
It is the least profitable sale to make because youʼre spending a bunch of money up front on traffic, advertising, joint ventures, affiliates, and so forth.
So 90 percent of us focus 90 percent of our efforts doing the hardest stuff possible and we give minimal attention to what is right in front of us, our current customer base.
Looking back at the example from the beginning of this post, why do we always start with doubling the # of customers? What if we kept the same 1000 customers but sold them more stuff? That seems like the easier path to success and one that comes with no customer acquisition cost.
The next time you talk about growing your business, don’t automatically turn that into the conversation of how to get more customers. The basis of the growth you are looking for may already be in place.