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CHAPTER 5 MULTIPLYING YOUR BUSINESS PROFITS

in five short years. I spend close to $1 million on ads a year,
four times that of any competitor. At first, people thought I
was nuts to spend so much on ads. What they did not realize
was that I knew how to make my ads work and was merely
putting in as many ‘$1’ investments as I could.

There is of course the law of diminishing returns. Spending
$1,000 on that same ad will not get you $1,800 forever. After
a while, the ad will lose its effectiveness as people see it more
often and your returns will drop. So what do marketing gurus
do? They continuously test out new ads and new promotional
angles to keep their ad investment returns high and positive.

Acquisition Cost:
The Big Secret in Buying Customers

An important concept you must learn as a business owner is
that you have to buy customers. Getting new customers costs
money! Acquisition cost is the cost of buying a new customer.

Let’s look at the previous example to determine what the
acquisition cost is. It took $1,000 to attract 240 leads that
eventually converted into 36 customers. So, it took $1,000 to
BUY 36 new customers.

SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES 141