I’ve been in and around the business world for almost 30 years, and I can tell you that while most savvy business owners understand that it’s important to maintain good relationships with their customers and keep them repurchasing for many years, most would be hard-pressed to give you a dollar amount if you asked them what the actual value of a lifetime customer is.

I think this is important because if they knew this number, most businesses would not be so frugal (cheap!) regarding customer acquisition and retention.

Jay Abraham wrote a good book called Getting Everything You Can Out of All You’ve Got, and chapter 5, “Break Even Today, Break the Bank Tomorrow,” addresses this topic in an interesting way. The following is an excerpt from Jay’s book.

“The current lifetime value of one of your clients is the total profit of an average client over the lifetime of his or her patronage – including all residual sales, less advertising, marketing, and incremental product or service-fulfillment expenses.

Let’s say that your typical new client brings you an average profit of $75 on the first sale. He or she repurchases three more times a year, with an average reorder amount of $300, and on each $300 reorder you make $150 gross profit. Now, with the average patronage life lasting two years, every new client is worth $975. You could theoretically afford to spend up to $975 to bring in a new client and still break even.”

Now, let me ask you, when you see $975 as the value of a lifetime customer, doesn’t it seem a little silly to be so frugal in both your customer acquisition and customer retention efforts?

I believe that the best customer retention tool available to any business is a monthly customer newsletter. When you consider that you can print and mail a newsletter for only $0.99 a month (or $11.88 per year), frankly, that seems like an absolute bargain! I founded No Hassle Newsletters to make quality newsletters available to any business, regardless of its size. Please visit www.NoHassleNewsletters.com to learn more.

I am known internationally for my tireless promotion of monthly newsletters. There is no doubt – let me rephrase that – there is not one grain of doubt whatsoever that a monthly customer newsletter will work miracles for your business, no matter what your business is!

In my opinion, newsletters are, dollar for dollar, the most effective marketing tool available. The following are some of the benefits of a customer newsletter:

1. Newsletters increase brand awareness.
2. Newsletters help build relationships with customers and potential customers.
3. Newsletters are an awesome way to introduce new products or services.
4. Newsletters can enhance your reputation as an expert in your industry.
5. Newsletters have a longer shelf life than other types of marketing have.
6. Newsletters are often read by multiple readers.
7. Newsletters are a great way to differentiate yourself from larger businesses, which typically don’t do a customer newsletter.

Most business owners understand that the cost of acquiring a new customer is considerably higher than that of keeping a current one. Most business owners also understand the 80-20 rule, which states that 80 percent of a company’s profits come from 20 percent of its customers. Jim Palmer’s 80-20 rule of marketing says that if that is true – and I believe it is – then most companies would be wise to concentrate more of their marketing efforts and dollars on enhancing the relationships they already have with their current customers and fewer on new customer acquisition.

In this shaky economy, every business should be very mindful of not losing a single customer. If you are already producing a monthly customer newsletter, congratulations and keep up the great job. If you are thinking about starting one for your business, wait no longer – it will prove to be the best decision you have ever made!

If you would like to receive my free 5-part e-course on the awesome power of newsletter marketing and receive a free newsletter template, please visit www.TheNewsletterGuru.com.