document.write('<p><b><font class="heading">Uncover Your Business\'s Most Valuable Hidden Asset</font></b></p><p><b><font class="text">');
document.write('Quick! What is your most valuable business asset?</b></p><p>If you are like most business people, your mind might quic');
document.write('kly fly over your balance sheet. Is it your equipment? Is it your location? Is it your accounts receivable?</p><p>For ');
document.write('most businesses, the most valuable business asset isn\'t on the balance sheet.</p><p>It\'s their customer list. And thos');
document.write('e businesses for whom this isn\'t the most valuable business asset should change their orientation to make it so.</p><p');
document.write('>The hardest, most expensive sale we ever make to a customer is the first one.</p><p>In that first, critical, transact');
document.write('ion we earn or lose the trust of the customer. Once we have the trust of the customer, we open the door to many more sal');
document.write('es and to referrals, which most of us agree are the very best new customers to get.</p><p>Many businesses frantically ');
document.write('work at bringing in new businesses while they neglect developing the &quot;acre of diamonds&quot; at their doorstep repr');
document.write('esented by their customer list.</p><p>&nbsp;<br><b>Why would you want to know the lifetime value of a customer?</b></p');
document.write('><p>The lifetime value of a customer is a measure of the value of the customer to your business. It is the potential c');
document.write('ontribution of the customer to your business over a period of time. When you know the lifetime value of a customer, you ');
document.write('have a benchmark for how much you would or should be willing to invest to acquire a customer.</p><p>When you evaluate ');
document.write('the effectiveness of your marketing, instead of focusing on the response ratio (how many responded compared to messages ');
document.write('delivered), you should focus on the return received (number of customers times lifetime value) for the investment made (');
document.write('campaign cost). Suddenly you find you can justify a much greater promotion investment when you look at your returns in t');
document.write('his way, and this provides the engine for significant business growth.</p><p>Chances are your competitors are too chea');
document.write('p to make the necessary investment, and this can give you a competitive advantage.</p><p><b>How can you quantify the &');
document.write('quot;lifetime value of a customer&quot;?</b></p><p>Estimate the profit for the transactions you expect to have with th');
document.write('e customer over the period you expect to do business with him or her. If this is an unknown long term, use five years. Y');
document.write('ou should collect statistics of the transactions done with customers and how long you keep customers. Also, factor in th');
document.write('e benefit for referrals from your customers.</p><p><b>Here\'s an example:</b></p><p>At a computer software store, cus');
document.write('tomers make average purchases each year of $500. The average gross profit is 30%. Most customers do business with the st');
document.write('ore for five years. One out of three customers refer a new customer.</p><blockquote><p><b>Average purchases </b>$ 50');
document.write('0</p><p><b>Years </b>X 5</p><p><b>Total purchases </b>$2,500</p><p><b>Gross profit % </b>X .30</p><p><b>Total gr');
document.write('oss profit </b>$750</p><p><b>Add 1/3 gross profit for referrals </b>$250</p><p><b>Total lifetime value </b>$1,000</p');
document.write('><p><b>If this business invested $1,000 to get a new customer, it would &quot;break even.&quot;</b></p></blockquote>');
document.write('<p>Obviously the business wants to make a profit, but now it has a benchmark to work on based on its own situation. Al');
document.write('so, advertising and promotion now represent an investment on which a return can be measured, instead of just an expense ');
document.write('&quot;thrown against the wall.&quot;</p><p>Try applying this lifetime value approach in your business as a growth stra');
document.write('tegy.</p>');