Want to 2x Your Marketing Budget? Here's how.

If a typical client pays $1,000 per month and stays for 12 months on average, the client lifetime value ("CLV") is $12,000 ($1,000 x 12 months).

But what if, instead, your client stays with you for 24 or even 36 months?

You've just doubled or even tripled your revenue per client compared to the typical CLV.

Let me ask you, would you be willing to spend more money to get a $36,000 client than you would a $12,000 client?

I would.

Guess what happens when you spend twice or three times more than your competitors?

Your marketing gets better.

You can do more interesting gift marketing.

You can advertise your brand and your offer in more places.

Takeaway: the company within a category with the best client lifetime value can and should out-market its competition by a wide mile.

Question to ponder:

👉 How does our CLV compare with our competitors?

Have a great day!

CQ

Frequently Asked Questions

How does client lifetime value (CLV) actually get calculated?

By multiplying monthly revenue by average retention in months. A client paying $1,000 a month and staying 12 months produces a $12,000 CLV, the baseline for evaluating how much can be invested to acquire that client.

What happens to CLV if retention doubles or triples?

Revenue per client doubles or triples accordingly, going from $12,000 to $24,000 or $36,000, without necessarily requiring anything different in monthly pricing, just longer retention.

Why would a business be willing to spend more to acquire a $36,000 client than a $12,000 one?

Because the higher CLV justifies a proportionally higher acquisition investment. More lifetime value per client means more room to spend on marketing and outreach to win that client in the first place.

What actually improves once an agency can afford to spend more per client acquisition?

Marketing quality across the board, more interesting gift marketing, more advertising placements, and a broader presence than competitors operating on a lower CLV and therefore a tighter acquisition budget.

What's the core takeaway about CLV and competitive marketing spend?

The company with the best client lifetime value within a category can and should out-market its competition by a wide margin, since its retention advantage directly funds a bigger marketing budget.