How to Go From \$2.7 Million To \$7.2 Without Spending A Dime
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# How to Go From \$2.7 Million To \$7.2 Without Spending A Dime

Hello,

Marlon here.

Everytime you put in \$32, you get back \$125.

Or everytime you put in \$203, you get back \$1,126.

How many times would play that slot?

I want to explain how to boil your business down to only
two numbers. And then use that to show you how one business
went from \$2.7 million to \$7.2 million without spending an
extra dime.

First….

This is how you cut through complexity and find simplicity.

Which is what I do for people.

I help you cut through the noise and get down to the heart
of the matter.

Any idiot can make things complex. Think about it. You probably
do a really good job at making things complex without anyone
else’s help!

The challenge is to make ’em simple so you can take action.
You can’t act on complex plans.

If you’re having troubles getting into gear, you need to simplify.

Here are the two numbers:

1. Cost to get a new customer

In marketing we call this “customer acquisition cost.”

You’ll see this referred to as LCV or LVC, however you want
to state it. Or just referred to as lifetime value for short.

Here are examples from the book Managing Customers As Investments
by Sunil Gupta and Donald Lehmann.

Example one:

In 2002 Ameritrade spent \$203 to get a new customer. The lifetime
value of a customer was \$1,126.

So they spent \$203 and got back \$1,126. See how this is something
you can understand and sink your teeth into?

Example two:

to the book. And the customer acquisition cost was \$32.

So you put in \$32 and you get back \$125. How many times do you
want to put \$32 into your slot machine?

Now, obviously those numbers are averages. And I’m SURE Netflix
has very different numbers today. This is just an example.

Example three:

Vincent James sold supplements via direct mail.

He took a business that normally would make \$2.7 on the front
end to \$7.2 million just by adding forced continuity or
recurring billing.

His customers would buy the first bottle for \$59.95, call it
\$60. Then they’d buy three more bottles for \$40 on continuity
or recurring billing.

So if you add \$60 to the three additional purchases for \$40
(\$120 over 3 months) you get \$180 customer value.

In other words, he took a \$60 sale and turned it into a \$180
sale. It cost him \$30 to make the sale.

So he spent \$30 and got back \$180.

How many times would you do that if you could?

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The recurring billing back end was an extra \$4.8 million
in sales.

In another business, Vincent tells how he ran full-page

Then, a week after he sent the first book, he’d send a letter
for a related product at \$200. 5% would buy.

the \$200 offer. 5 x \$200 = \$1,000. One thousand dollars
divided by the 100 letters mailed equals \$10 per customer.

of the customer.

He did that over and over. So it built up to where for
every \$10,000 he spent on ads, when he included the back
end sales, he’d make \$40,000.

So he put \$10,000 into the business slot machine and got
back \$40,000.

Now, if you know about Vincent, he got in trouble with the
FTC and they took away most of what he made.

But that is a totally separate issue from understanding the

So this is how a business works.

Let’s say you run an affiliate program.

You sell a \$60 product and pay out a \$40 commission. Each
customer has a value of \$20. For simplicity sake, I won’t
include the cost of fulfillment.

But out of 1,000 customers over a period of a year how much
more revenue do you get?

Your goal over the year should be take that \$20 per customer up
to say \$100 or more.

Marlon Sanders

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