How To Use The
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Last month, I introduced the Total Net Worth concept. It's a marketing principle that is rarely taught in business schools. Most accounting and marketing majors have never heard of it. But if you apply this principle, you will find that it can be the most important building block in your marketing strategy.
A LONG AND HAPPY ASSOCIATION Every restaurateur, physician, or insurance agent knows
that if you give your client good service, they'll stay with you
a lifetime. Every time a business person acquires a new client,
they are actually acquiring not just the original sale but a
stream of dollars.
Photo illustrators have the same opportunity to establish
long-term associations with photobuyers.
At first glance it may seem that the way to determine the average
worth of a customer is to divide your total sales by the number
of customers you have. However, this doesn't take into account
your non-customers, that is, the potential photobuyers on
your database who do not respond when you contact them by
your marketing methods (direct mail, telephone, print ad coupons,
etc.)
You nevertheless have to research and contact these markets, and
this cost of "not acquiring" a customer must be
factored in to your marketing costs.
$1,000 TO $50,000 PER CUSTOMER The positive side of this approach is that it allows you
to determine just how much you can spend to obtain a new customer
(i.e. photo editor, art director, graphic designer, etc.) who
eventually will pay you on average $20,000 to $50,000 or more
over a ten-year period.
Why ten years? First, this assumes that your marketing approach
is vertical and not across the board. The vertical approach
offers you the opportunity to match your specialized collection
with the specialized photos needs of a company that solicits your
specialization in stock photography.
Your great advantage is this: Here at PhotoSource International
we have found in our studies that the a company that buys photos
from a supplier will stay with that supplier ten years on
average. Of course, personnel may change, but as long as your
photo collection continues to match that company's theme photo
needs, (boating, outdoor recreation, aviation, botany, childhood
education, etc.) you can expect a long association with them.