When it comes to marketing, most businesses struggle with the all-important question, how much should they be spending. Most people drastically underspend on marketing, mostly because they can’t see an immediate return on investment.

To determine how much money you should be spending on marketing, there are a few formulas and metrics that you should be aware of. Two of the most important metrics are the lifetime value of a client and the total acquisition cost of each client.

The higher the total lifetime value of a customer is, the more you can spend on the acquisition. Rick and Matt recommend that for a fitness business, the ratio of the total lifetime value of your average client to customer acquisition cost should be about 10 to 1.

To give an example with our personal training business, the average client stays for 36 months and pays about $300 each month. This comes to a total lifetime value of around $10,000. The ideal amount of money we should be spending on marketing efforts to get each client then should be $1,000

Click play on the episode to learn more about these important marketing metrics and formulas that will help you understand how much money you should be spending on marketing.

Key Takeaways

• Why most people drastically underspend on marketing (03:01)
• The total lifetime value of a customer vs. customer acquisition cost (03:35)
• Determining the % of leads that end u as customers (06:53)
• Bullets before cannonballs (09:04)
• How to do maintenance marketing (10:52)
• Ensuring your team understands the value of a lead (13:33)
• Fixing the back end before sending money on the front end (15:03)

Additional Resources:

• www.AlloyPersonalTraining.com
• Learn About The Alloy Franchise Opportunity

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