The lower the average customer value is for your client, the more leads and sales you will need to generate for them to make a profit.
For example, if your client is a restaurant owner and your retainer & ad spend is $1,500, how many meals will the restaurant need to serve before they make a profit?
If they make a $50 gross profit per booking, then that is 30 diners that they need to serve just to pay you!
That is why I generally advise my mentoring clients to work in a niche where the average customer value is at least $1,000.
Just to give you a couple of quick examples… a plumbing job can easily cost $1k+, as would getting a new driveway or an annual subscription to a fancy gym.
Having said that, there are times when it would be ok to work with clients who have a lower average customer value.
The rule I use to determine if a niche is a good fit for me is this:
How much work would it take to generate a x5 ROI for my client after factoring in my retainer and the ad spend?
I would rather work in a niche where a handful of new customers will hit that target, than in a niche where they will need a boatload of new customers.
One key thing you need to remember is that your client probably won’t have the capacity to follow up with a large volume of leads.
So lead volume is often not a great metric to judge your performance by!
Originally published at https://abul-hussain.com on January 30, 2021.