Why is it important to know how much an average customer is worth to you?

As a business owner, one of the metrics you should really know is how much a customer is worth to you.  You can calculate this number by taking your average price minus your expense for that transaction.  Once you know that number, it is good to also calculate how much that average customer will be worth to you over the course of a year.  And how much that customer will be worth to you over the course of their lifetime with you.

When you know how much a customer is worth to you, you can start to figure out how many customers you need to have to reach your goals.  You can also begin to figure out if hiring a marketing company to come in and help you with your marketing is worth it.  You may not have the extra budget today to pay for marketing, but if that company can make a certain number of sales for you throughout the month, it can pay for itself and help you buy back the time you might need to close bigger deals.

Without knowing how much a new customer is worth to you, it is hard to know if you are making the right choices in your business about marketing, hiring and even expansion.