Retail Business
Tips
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Making Money with Your Retail
Store
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| Many businesses decisions are made based on
short-term effects. The goal of every business should be to maximize profits of the business in the long term. However, it is common for a business to lose a customer over an insignificant amount of money. Companies will spend a small fortune to attract new customers. Yes, every business needs new customers to keep growing, but do not neglect your current customers. It is much cheaper to keep your current customers happy. Your current customers will spend 5-10 times the amount of new customers. It would be a good idea for every business owner to get a rough idea of how much a customer produces to your profits. You may think differently about refunds and exchanges after calculating this figure. You need to figure out the average sale per customer, gross profit margin and how often they visit your store and make a purchase. For our example, we shall say the average purchase is $20 monthly and the gross profit margin is 45%. So far, this customer is adding $9 profit per month or $108 per year. You need to guess how long the average customer shops in your store. This will depend on many reasons such as age, size of town/ city, kind of store to name a few. Let’s say it is 10 years. This would make the lifetime value of your customer $1,080 in our example. These are small numbers in our example and most businesses the number will be much higher. However, the next time a customer has a problem with a $10 item that costs you $5; it would be wise to make sure the customer is satisfied with your solution. | ||||
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 Retail Business Tips
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Secrets to Making Money with Your Retail Store
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