The short answer, yes.
But it could also send you out of business even if it’s “the right thing to do”.
This post is inspired by a Warriforum thread started by Jason Parker:
Find A Hungry Market Blah Blah Blah …Whatever
Jason started with the concept that if you don’t have a hungry market and an easy way to reach them you shouldn’t go into business. He also presumed a new marketer with little money.
The discussion then turned to acquiring customers at a loss.
And so you are now at a post about two basic business principles related to that discussion:
1. Customer Acquisition Cost
2. The difference between Profit & Cash Flow
Let’s talk about 1 first, then how 2 will affect how you implement 1.
Every big, successful, business knows two things, how much it costs to get each new customer ( Customer Acquisition Cost ) and how much each customer is worth, on average, for the duration of the buyer/seller relationship established.
With that information, and a planned return on investment, the big, successful, company knows just how much it can spend to get a new customer.
Can Losing Money Make You Rich? Part 1» [more]
June 29th, 2008
Technorati: continuity make money ROI
