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CHAPTER 5 MULTIPLYING YOUR BUSINESS PROFITS

3) Average Dollar Purchase
‘Average Dollar Purchase’ refers to the average amount of
money that each customer spends with your business. Obviously,
every business will have a range of products, each one priced
differently from the others. Some customers will spend more
money (buying more or pricier items) and some will spend
less. However, it is important to know what is the average
dollar purchase per customer. We get this amount by taking
the total sales revenue divided by the number of customers.

4) Number of Repeat Purchases
Is it possible that a customer will return to buy more than once
from you in a month or year? Of course! The average number
of times a customer comes back to buy from your business is
known as the ‘Number of Repeat Purchases’. This is one of
the most important factors that determine a business’s success.

Successful businesses all have loyal customers who constantly
return to purchase on a regular basis, giving them guaranteed
streams of future income. The big mistake most business owners
make is assuming that their customers will automatically return
- because they are happy with their product/ service.

Even if your customer is happy with your business, there is a
chance that they may never return. This is because they may
get hijacked by the advertisements, promotions or salespeople
from your competition. Smart businesses use strategies that
actively entice their customers to keep returning. You will learn
how to become an expert in this in the later part of the chapter.

So, how does ‘Average Dollar Purchase’ and ‘Number of
Repeat Purchases’ fit into our formula for profits? If you take
your total ‘Number of Customers’ and multiply this number

132 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES