How much will you be willing to spend to get a new customer?
- The higher the lifetime value, the higher you can spend
- You can spend like A LOT to acquire a customer, and that would be a GREAT financial decision on the long run
- On the initial sale you will be definitely losing money (= going negative). But the thing here is that your customers by buying from you, they would be singing up for a 'continuity' program
- An important note here:
You have to keep them for the speculated lifetime with them for the acquisition cost to be worth it, or else it wouldn't be worth it