The Secret is to do more than spend your advertising budget. The secret to invest it in a way that provides tangible results that you can see in your cash register.

Direct Marketing can be very powerful because you can measure your return with more effectiveness.

Here's a Secret, determine what your average customer is worth to you. How much do they spend? Once you have determined their economic value, you can then begin to forecast with certainty just how much you will need to invest to attract more.

Don't Make the Mistake of planning your advertising or marketing budget based on sales. Base your budgeting on how much it costs you to add more customers to your bottom-line. After all, if you know what they're worth, then your planning will be more effective.

The Power Step in this process is to have a flexible budget based on economics, competition and other factors.

Example - Let's say that your average customer spends $10,000 over the life of your average relationship period. After deducting the cost of goods, overhead taxes, etc., all you need is $2,000. The formula then is that your new customers are worth $2,000 to your bottom-line. How much are you willing to invest to earn $2,000? This figure will be based on your need for growth along with several other factors.

A Good Advertising & Marketing Agency will always provide a strong justification for expenditure. You can help your marketing and ad agency by knowing the value of your average client or customer.

Take One Final Tip. Break down the average value of a new customer into two sections: immediate value & value over the life of the relationship.

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Written by: Robert Zink
President of Adstar Advertising Inc.

A full service advertising agency serving clients in Seattle, Tacoma, Kent, Auburn, Puyallup, and entire Puget Sound. Adstar also has clients in several other states.