February 26, 2020
E-Commerce Business: The Best Way To Grow And Scale

E-Commerce Business: The Best Way To Grow And Scale

in this video I want to talk to you
about why it’s so important for you to be able to spend as much money as you
possibly can to acquire a customer. My name is Traci Reuter and I’m the CEO and
Founder of Divine Social. We are a social advertising agency and we specialize in
the Facebook and Instagram platforms. So whenever we work with any of our clients whether they be coaches, consultants, authors, or e-commerce brands, we’re
always working around what their ideal cost-per-acquisition is. Now there’s a
saying and I don’t know who originated it I know I’ve heard Ryan Deiss has said
this but I think he might not even be the one who originated it but the thing
goes is, “he or she who can spend the most to acquire a customer wins.” Now this
could not be any more true especially when it comes to e-commerce and
e-commerce businesses it can be very expensive and difficult to acquire
clients now it’s natural that you as an e-commerce business owner would be
thinking I need to try to acquire my customers and my clients for as little
as I possibly can the problem with that is is that every one of your competitors
are in the same exact boat everybody everyone that everyone is trying to
acquire clients for the least amount possible where you really have the
ability to grow in scale is when you understand your numbers to the point
that you know what the maximum you can spend is now that being said I don’t
encourage you to go and spend that like let’s say the maximum you can acquire to
spend a client is $50 okay you know what your lifetime value is per client so
this is a number that you need to know if you don’t know what each new customer
is going to provide in terms of revenue over the course of their time doing
business with you you don’t understand what a new customer is worth so first
and foremost you have to understand what’s the lifetime value of a customer
some people use they truly use the lifetime I’ve heard other people that
suggest to use only 60 days cash flow is a big deal and so you want to make sure
that whatever metric you use it’s setting you up to be cashflow positive
if you get into a situation where you’re spending so much to acquire a client and
you’re not cashflow positive it will eventually catch up with you and you
won’t be able to continue your ads so first and foremost know what is the the
lifetime value or the 60 day lifetime value of a new customer now once you
understand that and you understand your ear you
know your margins your yada right your earnings before income taxes and
accruals I think it is right so once you understand those numbers and you know
what the maximum is that you can spend then you should with confidence invest
that in your advertising to acquire your customers as close to that number as
possible now if you’ve optimized your campaigns
and they’re doing great you can acquire clients for less than that then like
high five that’s fantastic but you should always
have the attitude that you want to be able to maximize on the front end
by investing the the maximum amount possible to acquire a customer if you do
that then what’s gonna happen is is you’re going to put yourself in a
position where you’ll be able to grow and scale faster than your competitors
can because if you keep the small mindset if I want to spend the least
amount possible to acquire a client you’re missing the big picture you’re
missing the point and you’ll never grow to the ability or
to the full potential that your business has and that would be that’d be a shame
because I’m assuming that you’re in business because you have a product you
have a service that can really make a difference in people’s lives and if
that’s the case you have a responsibility to maximize your growth
so I hope this makes sense I hope this concept I know for some
people it can be very very difficult to wrap their mind around that
I just want you to know that as a advertising agency and we work with
clients we feel a responsibility to manage the ad spend to just as if it was
our own money right so we’re always looking to be able to maximize the
return but just when we understand what the client’s maximum amount that it is
that they can spend then we know what the limits are and then what we do is we
work to optimize to be able to spend as much as possible but also at the same
time it’s a balancing act at the same time to deliver the biggest possible
return on adspend so it takes some finesse and it takes an
experience and that’s why when you get to a point that you’re big enough to
really start scaling your ad your advertising budget you want to bring in
whether it’s somebody like my team or team like ours you want to bring in
outside help because you want to make sure you’re getting the most return on
your ad spend as you possibly can at the same time by spending as much as
you possibly can to acquire a new client it feels a little contradictory but it’s
actually not so with that if you grabbed our three pillars two successful
social ad campaigns I want to encourage you to download my free mini-course it’s
a teaching plus worksheets so that you can start to build out a strategy that
will help you to be able to acquire clients at the maximum that you possibly
can spend so that you can you can grow and scale your company that’s why we
exist we exist to help great brands like yours to be able to grow and scale and
be around for the long haul. My name is Traci Reuter, the best is yet to come and
we’ll see you next time.

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