Home Based Business Marketing Money Magnet

This online business education is about marketing research & strategic planning. In reality, it is often difficult to make such calculations due to the complexity of the calculations, lack of reliable input data, or both.

The specific calculation for home based business marketing depends on the nature of the customer relationship. For example, companies with a monthly billing cycle, such as mobile phone operators, can count on a reasonably reliable stream of recurring revenue from each customer. Car manufacturers, on the other hand, have less insight into when or whether a customer will make a repeat purchase.

Nevertheless, certain data inputs are commonly used when making customer lifetime value calculations:

•  Acquisition cost The amount of money a home based business marketing department has to spend, on average, to acquire a single new customer.
•  Churn rate The percentage of customers who end their relationship with a company in a given time period. Churn rate typically applies to subscription services, such as long-distance phone service or magazines.  
•  Discount rate The cost of capital used to discount future revenue from a customer. Discounting is an advanced topic that is frequently ignored in customer lifetime value calculations. The current interest rate is sometimes used as a simple (but incorrect) proxy for discount rate.
•  Retention cost The amount of money a company has to spend in a given time period to retain an existing customer. Retention costs include customer support, billing, promotional incentives, etc.
•  Time period The unit of time into which a customer relationship is divided for analysis. A year is the most commonly used time period. Customer lifetime value is a multi-period calculation, usually stretching 3-7 years into the future. In practice, analysis beyond this point is viewed as too speculative to be reliable.
•  Periodic Revenue The amount of revenue collected from a customer in the time period.

 Profit Margin profit as a percentage of revenue. Depending on circumstances this may be reflected as a percentage of gross or net profit. For incremental home based business marketing that does not incur any incremental overhead that would be allocated against profit, gross profit margins are acceptable.  

Look at it this way, all the time, effort & money it took to prospect them and for them to trust you enough to make an initial purchase is the hardest part of selling in your business. Starting fresh with a new prospect sounds a bit silly. This is why I am here to show you a much better way.

It is your job to build trust in your prospect; they will not buy from you until they trust you first. Trust building is a process; this is where marketing begins the process. When done properly, home based business marketing makes you extremely attractive to your prospects.

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