Find New Customers

By Steve Gillman

Perhaps the most basic way to make more money with your business is to find new customers. But how you do this is important. More specifically, it matters how much it costs you to get each new customer. Naturally, you can't spend more to obtain new sales than the profit you make from them (although it happens all the time).

But even if you are gaining more than you invest in customer acquisition, you still should be looking for the least expensive way to get each new person to walk in that door, pick up that phone or send in that order. Why is this so important? After all, if you make $10,000 in additional gross profits from new customers after a $5,000 investment, you're doing well, right?

You are doing well. But let's assume your budget for marketing and advertising is limited (aren't they all)? Suppose that "great" ad campaign nets you 1,000 new customers and the $10,000 in additional gross profit from that comes in slowly over the months that follow. These customers cost you $5 each if you spent $5,000 to get them. Now suppose that there are ways to get new customers for just $1 each. This would mean one of two things. If there is a limited number of new clients available (say in a small town), you still get a thousand, but you save $4,000, which goes straight to the bottom line. But what if there are many ways to get new customers for $1 each, and in larger amounts? In that case, a $5,000 budget could net you 5,000 new customers, or $50,000 in additional profits over the coming months.

To maximize the return on your investment, then, you should always start with the cheapest ways to find new customers, and only if you still have money to spend--and it can net more than the cost--should you look to more expensive advertising. Some of the other pages in this section on how to make more money with you business address getting new customers. They include:

Increase Profits with Low-Risk Experiments

Increase Business Visibility

Use Word of Mouth Advertising

Measure Advertising Results

That last one is particularly important, because to find the cheapest ways to find new customers, you have to be measuring the cost. Look at all the ways your competitors use as well. Start with the ones that are doing better than you. Also give some consideration to what kind of customers you are getting. Some will spend more than others.

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