What Your Customers are Worth (and Why it Matters)

What is the value of a customer? What profit can they bring this week? This year? Over a lifetime? It may seem like a simple concept, but many small businesses have no idea what a regular customer is worth to their business. This creates two problems:

  • Uncertainty about effective marketing. What is the number of new customers you’d like to attract and what is an appropriate budget to do that? Defining a customer value will guide your marketing strategies!
  • Ambivalence regarding customer retention. With a metric for measuring customer values, you can navigate appropriate parameters for retaining them or expanding their business. Research shows that increasing customer retention rates by merely 5% increases profits by 25% to 95%!

Customer Lifetime Value

While there are many complex formulas for calculating a Customer Lifetime Value (CLV), a basic approach is to break calculations into five digestible portions, like this:

  1. Average Order Value (AOV). On the most basic level, AOV is calculated by how much money is spent per customer in a year, divided by how many orders are placed by that customer in that timeframe.
  2. Purchase Frequency (f). Take the number of orders/visits/transactions from the past year and divide it by the number of unique customers you had. The total equals frequency, or how often an average customer purchased from you.
  3. Customer Value (cv). The base value of a customer can be calculated by multiplying the AOV by the purchase frequency (cv = AOV * f). In this instance, the customer value is being calculated for one year.
  4. Average Lifespan/Time (t). A customer’s lifespan is how long they actively connect with your business before they move on or go dormant. This can be a complex calculation, but to keep things simple you can either give a broad estimate (an educated guess) or you can calculate an average based on a select number of known customers (adding the length of each of their commitments and dividing by the number of customers). For example: Total Length of Commitment/Number of Individual Customers = Average Customer Lifespan (t).
  5. Customer Lifetime Value (CLV). Now that you’ve got a general idea of a customer’s value for a year and the average customer lifespan, you can use these variables for a lifetime value: Customer value (cv) * Average Lifespan (t) = Customer Lifetime Value (CLV)

While this is a very simplified equation, even a ballpark CLV can give you a more accurate idea of how valuable each client is to your business. What should you look to spend in order to gain a customer? How much should you spend to extend their loyalty? A benchmark CLV will give you a helpful base for marketing, loyalty programs, and sales goals for the upcoming year. Take a look at a more complex approach Starbucks has taken to determine their CLV as a whopping $14,099!1

Your Customers Are Your Future

A customer represents the future of your success and your livelihood, and it will be difficult to thrive if you aren’t willing to risk or invest to attract new business. What are your obstacles to expanding your reach or enlarging your advertising? Has the uncertainty of direct mail marketing kept your business from growing? Why not rely on our expertise? We offer sophisticated, simple ways to reach a mass audience for an amount that works within your budget. Need a creative concept or help to carry it to completion? We offer prompt, knowledgeable service for every custom design mailing. Give us a call today at 856.429.07105!

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The Lessons Taught by The Movie “Office Space”

ThinkstockPhotos-644276362.jpgClose your eyes and picture this: On your early morning commute, you get stuck in bumper-to-bumper traffic. Your senses are bombarded with horns honking, the sound of breaks squeaking, and the pungent smell of exhaust. Your reward for making it through this mess isn’t much better. Your individual cubicle awaits, lit only by artificial lights which have a way of making you look sick and feel hopeless. Once you arrive in your allotted space, you are faced with mountains of redundant, seemingly meaningless tasks you must complete, while answering to eight different bosses who don’t communicate amongst themselves.

If the movie “Office Space” came to mind during this exercise, you are getting the right idea. While the movie’s comedic portrayal of an office environment is exaggerated, as business owners, it’s wise to learn the lessons you can glean from it.

Delegate

Bill Lumbergh is the boss in the movie “Office Space.” He is often seen hanging around Peter’s (main character’s) cubicle, overreaching his boundaries and seemingly controlling every aspect of Peter’s day. Peter also has eight bosses other than Bill, or maybe including him. This means everything has to be repeated over and over to the point of insanity. This drives Peter crazy, and it is not productive either.

Lesson #1: Give your employees what they need to do the job: training, materials, etc. Then, let them work. Get out of their way. Studies have even proven that micromanaging can cause employees to perform at a lower level, not higher. Just imagine trying to do even a simple task with someone standing right over your shoulder, and it’s easy to understand why micromanaging is so detrimental.

Provide Well Functioning Equipment/Updated Software

In the movie, the copy machine almost takes on the role of character thanks to the fact that it is so detested by Michael and the other main characters. It seems this copier/printer will never work properly, which causes endless difficulties. Peter, Samir, and Michael (main characters) end up destroying the machine in a rural field outside town after their frustrations reach a boiling over point.

Lesson #2: You should provide your employees with what they need to get their job done as mentioned above. Sure, things break. That’s understandable. However, expecting your employees to continue to use subpar equipment, computer, software, etc. yet still pushing them to meet deadlines and maintain the same level of production simply isn’t fair.

Create a High-Quality Working Environment

It is no wonder the characters of “Office Space” so detest their jobs. They work in 6′ x 6′ cubicles with no windows. In addition, Peter is situated right across from another employee who patches calls through, so in essence, she spends all day saying “just a moment” in an irritatingly spunky voice.

Lesson #3: Cubicles are sometimes unavoidable in today’s office buildings. However, give your employees the freedom to move around to break up their day. Make sure you have seating available for your employees outside where they can walk around and enjoy being outdoors. If outdoor space isn’t an option, at least make sure you provide a lounge with couches or comfortable chairs where employees can go to take a break from their own cubicle walls.

Most employees understand that doing business in today’s technology-saturated society often means they are required to sit at a desk and work on a computer most of the day. This doesn’t have to look like the movie “Office Space,” though. Thankfully, with a little thought and purposeful planning, you can ensure your employees never feel like Peter or the other characters from the movie. Simply adhere to these lessons from “Office Space,” and you will be heading in the right direction.

In Your Pocket.

04 SmFd.jpgThere’s a lot that can fit into a pocket! Custom-printed folders can vary from presentation size down to mini-folders just big enough for your business card and a ticket to the event of the year. With a fold and tuck, your full-color print pieces never had a better surrounding. Safe and secure inside a folder that holds your brand and message, you’ll feel the difference a sturdy folder will make. Let us line your pockets with vibrant color by custom printing folders of any size and shape to hold your assets securely. Call today 856.4290715 or visit: http://www.sjprinter.com

Leading Like a Pro

ALL-STAR LEADING

Creating a print project that pops takes more than having the best printer on the block. It also requires stellar design and text that is well thought-out and easy to read.

Have you ever wondered how those professionally designed print pieces look so incredibly clean-cut and crisp? To get that clean, easy-to-read look, professional designers make use of the big three in typography: leading, kerning, and tracking. Although all of them are important, leading can make or break a design.

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What is Leading?

Simply put, the term ‘leading’ (pronounced LED-ing) refers to the amount of spacing between lines of text. (Fun fact: The term originated from hand-typesetting where thin strips of lead were placed into the forms to increase the distance between lines of text.) When you want to save space on a page or use up more space on a page, adjusting the leading is the way to go. Leading can also be used to change the aesthetics of your design, whether your text is the hero of your design or informational only. Mastering this design element will allow you to create balanced, well-formatted text that helps sell your product or service.

First Things First

When you type text into a word processing or graphic design program, you will generally get a pleasing result. Sometimes, though, the spacing may feel a bit “off.” This can be especially true if you’re using a variety of sizes, fonts, or other character adjustments. When you type the same word in a few different fonts, you will quickly see the difference between how the spacing works for individual words, both horizontally and vertically. No fonts are exactly the same, which can cause awkwardness in your design. The cure for that awkwardness is formatting.

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General Formatting

Formatting can be applied at either the character level or the paragraph level. Paragraph-level formatting includes text alignment (left, right, center or justified) as well as spacing before or after paragraphs. Examples of character-level formatting include the style and choice of font, size of the characters, and the leading.

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Application of Leading
While leading is considered a character-level attribute, it should generally be applied at the paragraph level to your text. This is because applying it only to a few lines of the text within a paragraph will only change the lines highlighted — which leaves you with an uneven final product.
Changing the fixed leading in InDesign can be accomplished in a few simple steps:
  • Go to ‘Edit,’ then ‘Preferences’ in previous versions of InDesign, or ‘Preferences’ in InDesign CC
  • Choose ‘Type’ from the left-side of the list
  • Under ‘Type Options,’ choose ‘Apply Leading to Entire Paragraphs’
  • Select ‘OK’
All finished! Now, every paragraph that you begin will inherit these same options, giving you very consistent and clear paragraphs that are easily read by your audience. InDesign is a very smart program, so even if you don’t set a leading value, you’ll find that it defaults to auto leading — which is 120 percent of the current font size. Realistically, that translates into a space between lines of 12 pts if you’re using a 10 pt font.
Want to learn more about how leading and character formatting can make the text in your next printing project really pop? Give us a call to get started!

 

The Cake Fight

kirkTwo big tom cats were strolling around a neighborhood after a big celebration and came across a big delicious piece of cake. They immediately started arguing over the cake.

A monkey was passing by when he overheard the two cats fighting. The monkey tried to help the cats and said, “Don’t fight, my friends. I can easily divide the cake into two pieces. Let me equally share the cake among you both.” The cats agreed and handed the cake over to the monkey. The monkey split the cake into two parts. Then he shook his head and said, “Oh no! One piece is slightly bigger than the other one. Let me take a bite of the bigger one to even them out.” After taking a bite of the bigger piece, he sighed and said “Oh no! This has become smaller now.” And he took a bite from the other piece and kept doing so until there was no cake left, leaving both cats disappointed.

Here’s the way I see it: Henry Boye once said it best: “The most important trip you may take in life is meeting people halfway.” After all, when you choose to quarrel and fight, someone else always gains.

Cash Flow and Marketing: What You Need to Know

ThinkstockPhotos-484376185.jpgCash flow is important in the lifespan of any business, but one of the key things to understand is that it’s about more than just “money in versus money out.” It’s a valuable look into the bigger picture of what you’re doing, and by having a handle on this aspect of your finances, you can take advantage of business opportunities when they arise.

First, you need to understand how every element of your business relates to this cash flow concept, including marketing. To that point, marketing has a very specific relationship with cash flow that you’re going to need to be aware of moving forward.

Hone Your Budget

Yes, it’s true that marketing costs can often seem unpredictable. However, working hard to hone your marketing budget can make these unexpected situations easier to deal with.

To get started, sit down and think about your upcoming marketing efforts in relation to your other expected cash inflows and outflows. You can’t afford to throw just anything at the wall to see what sticks;  you have to be more precise than that. Create a realistic marketing budget (that includes room for experimentation if needed) that is proportional to the rest of your expected business expenses and revenue streams.

It’s All About That Return

What matters most? Return on investment. For this, focus on the metrics that provide you the context necessary to understand your marketing efforts.

Essentially, stop thinking about marketing ROI as just “how many sales did that last campaign bring in?” and don’t be afraid to break things down on a more granular level. Start looking at metrics like your customer acquisition cost. If one of your campaigns was aimed at increasing more traffic to your website, start breaking things down based on metrics like “time spent on site” and “conversion rate.”

It’s important to know how your marketing collateral is performing in terms of overall sales and revenues, but in terms of your cash flow you need to dive deeper than that. As long as you’re able to A) show that your marketing is giving you something in return, and B) you can identify exactly what that something is and when it occurs, you know where the value of every marketing dollar rests.

This, in turn, will give you the context necessary to understand marketing’s affect on cash flow and vice versa. When you know that “X action will pay off in Y way after Z amount of time,” you suddenly know the impact that every marketing decision you make actually has and when that impact is going to occur. This makes long-term cash flow projections not only easier to make but more accurate as well.

Slim Business Cards

A MEMORABLE WAY TO DIFFERENTIATE YOUR BRAND

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Slim business cards are a sleek, bold way to make your business stand apart from your competition. While most of your competitors are printing traditional business cards, slim cards grab attention and are a memorable way to differentiate your brand.

In addition to exchanging cards during introductions, slim business cards are also an excellent tool for hangtags, leave-behinds, mailing inserts, and promotional tear-aways. Slim business cards can also be designed as a dual purpose way to combine your contact information with a coupon, event reminder, save the date, or website promotion.

While slim business cards are typically a narrow rectangular shape, they are available in a variety of dimensions, and can also include creative accents, such as die cuts, embossing, foil stamping, and much more.

If you’d like help creating the perfect slim business card that fits your style, we’d love to visit with you today!