Most people fail at marketing by not understanding this ONE super-important concept:

Before I tell you what it is, let me ask you this: if you spent $10 to make $10, is that a win or a loss?

By default most people will say that it is an effective loss, as typically you are paying a marketer or lose a bit of money in the fulfillment of the product.

However, that is NOT a loss. In fact, if you are capable of spending $10 to make $10, even $10 to make $8, you’re probably going to be massively successful IF you understand this one thing.

You see, most businesses are trying to spend $10 to make $50 back instantly.

While it can happen (and does often), what makes you think your competitors won’t decide to spend $15 to make $50?

Suddenly they are spending $15 to make $50, so you spend $20 to make $50- after all, only one of you gets the advertising space!

Your competitor suddenly decides “okay I’m gonna spend $40 to make $50,” because he’s a crazy beast that likes tight margins.

Next thing you know you’re both hardly breaking even, hustling your face off for nothing.

Then Big Billy comes in and spends $100 to make $50, crushes you and your competitor like puny worthless ants…

So you wait, expecting Big Billy to go out of business so that you can re-enter the advertising sphere.

But… Big Billy doesn’t go out of business. In fact, he’s spending $100 to make $50, yet seems to be doing just fine. He buys a lambo. He buys a mansion. He has 5 girlfriends. He rubs it in your face. You feel bad.

What’s going on here?

In this example Big Billy understands something few business owners do: lifetime value of a customer.

Big Billy spends $100 to make $50, costing him $50 today…

BUT he’s a long-term thinker.

In the next month he sends re-targeting ads to the previous buyer, offers up-sells & upgrades, and also gets the customer on a subscription. By month 3, the customer which cost him a loss of $50 on day 1 brings in an extra $400, giving him a net profit over 3 months of $350.

THIS is how you completely dominate in your marketing campaigns! It’s not just about the front-end… Of course if you can spend $10 to make $50, that’s epic- DO IT!

But be prepared for ad costs to increase, and those that have back-end sales processes (email follow ups, re-targeting ads, up-sells, referral incentives, etc.) are the only ones who will survive the game.

So, I have good news and bad news.

The bad news is that increasing advertising costs is inevitable. There will always be periods of time, niches, products, etc. that give you a temporary short-term advantage and allow you to print off cash from ads just like that.

The good- no GREAT- news is that VERY few people have the capacity to even think 45 days out, so if you can create a sales process that increases the 45-day value of a customer, then you can launch ads ad an initial loss but turn over profit over a 45 day period.

The bigger you get and the greater your cash reserves, the more long-term you should think!

This is why large companies can invest millions into traditional TV marketing- they know it won’t convert immediately, but they know that long-term their brand will become permanently printed in everyone’s minds and they’ll make bucket loads of profit down the line.

In short, stop focusing on TODAY and start focusing long-term. Not even super long-term- just how can you increase profit from a previous customer over a 3 month period?

When you know your 3-month profits, then you can focus on crushing the advertising space with short-term losses because you are certain that all temporary losses will be made back and more within 3 months.

Your competitors will not be able to afford ads as you out-bid them, setting you up for long-term domination.

It’s very simple, just requires a bit of patience and long-term thinking.

What do you think of this? How can you apply it? Give me a like if you found this useful and comment what you think!