A key component of Customer Development Strategy is knowing how much to invest in marketing to make sure you have a healthy business in the future.
Let me show you an example.
Let's say that you lose $15 profit acquiring a customer. Then, the customer delivers the following amount of annual profit in each subsequent year.
- Year 0 = $8 (this is in the remainder of the acquisition year).
- Year 1 = $12.
- Year 2 = $8.
- Year 3 = $5.
- Year 4 = $4.
- Year 5 = $3.