What is the lifetime value of a client? And how do I calculate it?

To understand the lifetime value of client we must define the different components as we are dealing with time and value. Time as in retention time period of the customer and value as in the average value in currency. The lifetime value of the client can then defined as per the image below.

LTV = Average Value of Sale x Number of Transactions x Retention Period.

CLV = LTV x Profit Margin

When you understand this formula we can see that the value of one customer is extremely important to your business and protecting that value is off utmost important. One of the components in the formula is retention time period, to maximize the LTV we have to try increase the time period of retaining a customer, the longer the client stays a customer the greater the LTV value will be. Simultaneously we want to maximize the number of transactions the customer produces  within the time period, this too effect the LTV with great effect.

Let’s put his into an example specific to the Microblading industry.

For this explanation we will assume the cost of Microblading today is a R1500, a 6 week Touch up is R750 and an annual fill is R1000.

So potentially we have 3 payments within a year with one client.

LTV = R1083 x 3 x 1

LTV = R3250

CLV = R3250 * 80%

CLV = R2600

So you can see that one client is not just worth the initial procedure cost, we need that customer to maximize their spend to achieve the full spend at your salon.

On a turnover calculation 1 client is worth R3250 per year, now we as digital marketers here at the Digital Ninja need to strategize and campaign to get more of these R3250 client through your business, once we have achieved an plugged a pipeline of customers lining up at your door we are growing the business substantially.

Did you know on an evolving 12 month basis, if you land 1 new client a day with the LTV calculated at R3205, you are running a R1 186 250 business in turnover at best, at worst you just use the initial procedure cost you are running R547 500 business in turnover. These are amazing but simple number broken down to achieve a goal, in order to achieve that goal for your business.

If you want to receive a Free Audit, click HERE and we will most definitely help grow your business guaranteed.

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What can digital marketing do for your business?

That is a very good question in today’s high paced business world. Did you know According to a Microsoft study the average attention span of a human is 8 seconds. As digital marketers ans knowing this information, we can design campaigns, strategize our approach and deliver content through technology that can capture audiences in order to drive sales.

Sales! Everyone needs it right, for a business to thrive sales needs to top priority and we need marketing to drive those sales. Marketing has evolved at a fast pace with various platforms to post and view content on. Digital marketing is more than just brand exposure on these various platforms, it allows us to market a proposal or deliver a jaw dropping offer, it allows us to reach a specific customer and eliminates the “one shoe fits all approach”.

Digital marketing allows more than that, it allows us to generate high quality leads, build campaigns, automate systems and most importantly drive sales and grow your business.

By building a pipeline for sales through a sales funnel, it allows business owners to make executive decisions over there business, rather than worry where their next client is going to come from. This sales funnel is set up in a way that automates the selling process, generates the lead, makes the sale and responds with follow up email sequence. Sound to simple right, but that’s how easy it is.

Digital marketing through The Digital Ninja can set your business apart from your competition, with highly specialised digital marketers this team will literally help grow your business with optimised strategies overnight.

Digital Marketing is by far the most cost-effective solution to marketing. Don’t be left behind, let us grow your business and produce the results you need.

For a FREE Audit click HERE and let us help grow your business.

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Can digital marketing be automated ?

When talking anything digital our minds wonder off to this notion of robotics or automation, well mine does when I think anything digital. You see in most cases structures and systems can be put in place in order to automate the process and do the heavy lifting. In most cases, manual human intervention is still required.

Image result for automated robot

As we live in a digital age, with various social media platforms delivering sound, video and image content, I believe that a large chunk of the work can be automated, however, digital marketers still have set the parameters, define the campaigns, strategize our deliverables, determine our target market, build our sales funnels, set up a leads database and send out emails. Wow that’s a mouthful. Unfortunately, there is no way of getting away from the work or the workload when it comes to marketing. That is why it is so important to find a someone who specialises in digital marketing within your market; you want to get it right the first time. With this digital age every platform, every detail, every campaign becomes highly specialised.

Now you ask me, “…but wait you said some work can be automated.” The part of the value chain that can be automated once set up, is the running of your Face Book ads, Google Ads, data and lead capturing and then confirmation or thank you e-mail. That does form a large part of the work, but the setting up and researching the work in order to get it right the ‘first time’ and make the campaign a success is most important. If this is done correctly, the leads and conversions will follow, and a solid data base of potential customers will develop.

In conclusion, the thought of a digital marketing being automated completely is not possible, however we have amazing software that provides some help in order to facilitate and assist this mindset of automation.

If you would like us to do a Free Audit , click HERE. Let us help grow your business.

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What is a reasonable time to expect a return on your ad spend?

ROI is the goal and the driving force behind achieving results for every digital campaign. Every layer of your funnel every step in the process is designed to achieve a goal. These events are called conversions, whether it’s an opt in or retrieving data in the form of an email address, phone number or ultimately a sale there are a lot of variables which affect the ROI. The amazing thing is, we can track these data points, optimize them and improve efficiency on ad spend.

*PHOTO CREDIT – IFF INTERNATIONAL  

Calculating ROI

As a digital marketer, it is our responsivity to analyse the events created by our target audience and show each campaigns performance. To do this, we will be measuring different types of activity, depending on our goals for each campaign.

From the client’s side and point of view, the client’s expectation is a dual one. Monetary and Time are two key elements in the expectation of the ROI.

So, let’s take a look at the type of campaign goals and how you can measure them. The first step in determining ROI is identifying the metrics by which the campaign will be analyzed. And those metrics should allow analysis in real-time, so that you can track the performance indicators you have identified.

For Lead Generation Campaigns
The goal of these campaigns is to bring customers to the top of a sales funnel. One of the things that we track is where those leads are coming from. Depending on the strategy the campaign may include blog posts, Facebook ads and posts, Google ads or YouTube links or redirect links from other sources, etc. To really analyze the performance of a campaign, you will need to know the sources of your traffic. The results can be analyzed by:

  • Increase in website traffic
  • Facebook Pixel Events tracking code
  • Live chat conversations in responses to questions/requests
  • Opt-ins into the funnel step
  • Attendance at webinars, podcasts, and live events, along with acquiring contact information of attendees
  • Lead volume, i.e. lead capturing

What is Considered a Good ROI?

We find average bench results across the internet, but a good benchmark is 3%. According to a study by Nielsen, the average return on ad spend is 2.87:1, meaning for every $1 spent on advertising, the average company makes $2.87. However, we strive for a higher ROAS.

From our experience and a previous campaign result we achieved the following in one week.

Facebook Ad Spend: R1502.59

Salon Leads: 12

Salon Bookings: 4

LTV of Client: R2080

Turnover: R2080 x 4 = R8320

ROI on Leads : 30%

ROI on ad spend: 554%

Results may vary and every campaign is different, but we strive to achieve the best results for our client. These results were achieved in one week. Therefore, we can ensure a money back guarantee with 30-50 leads a month.

In conclusion, campaigns are live, meaning results are instant and they come in fast. We will see leads come in within 3 days. Converting those leads are up to the client, but we will help train and guide our clients in order to achieve high conversions and ultimately paying customers.

Let The Digital Ninja help grow your business by generating new leads. Click HERE to get started.

The Digital Ninja