April 14, 2016

Each New Customer Tends To Be Less Valuable

If you are a social media expert, you know very well that you have a lot of clients who grow from $0 to $10,000,000 in annual sales by savvy use of social. This is a common story.

And then, new customer growth slows. The easy (free) names run out.

This is where direct response comes into play. High ROI programs like paid search. You spend money, you get new customers at an acceptable cost. This pushes you from $10,000,000 to $30,000,000. And then, new customer growth slows. The easy paid names run out.

This is where brand response marketing has to come into play. Has to. You have no choice but to plant seeds in spring, harvest new customers at/before Christmas, and earn profit next year. This has to be done, of course, because the names that get you from $30,000,000 to $100,000,000 are going to be even more expensive.

Each incremental name gets more expensive ... and worse ... generates less future demand. Brand response marketing is required to combat the ever-worsening mathematics of incremental new customers.