This BLEW UP my Video Business
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- Опубліковано 30 вер 2024
- I want to share a marketing concept called LTV that completely change my outlook on marketing and advertising. And I think it can have a huge benefit for you in your video business.
I’ll show you the simple equation at the end, so you can calculate this for yourself. And I’ll show you inside my bookkeeping software, so you can see how I calculate this for myself.
When you get a client, as long as you do a good job, there is a good chance they’ll hire you again for a video. Most production companies and independent freelancers I know work with repeat clients all the time.
So let’s say you spend 1000 to get a client and they paid you 1500. That’s not great if you look at it like that.
But if you do some basic math and figure out the lifetime value of that client, it’s an entirely different picture.
Here is a simple way to do that math. Let’s say you’ve been in business for 3 years, even if you’re just a freelancer.
Take all the clients you have and add them together. Let’s say you worked with 30 people/businesses in 3 years.
Now divide every dollar you’ve made in the last 3 years by the number of clients.
Let’s say you made 50k a year, so that’s 150k / 30 clients
That means, on average, the lifetime value of a client is 5000 for you. Now, spending 1000 or 2000 on marketing to acquire any client doesn’t sound so bad.
Yes, some clients are only going to give you a small job, one time and you’ll never hear from them again. But some will hire you for a decade to come.
Learn the exact blueprint I used to go from a struggling videographer, to running a profitable video production business, in this one-hour free training.
www.filmmaking...
Saj you are the most genuine UA-camr with the best info thanks so much for everything you do.
Yes, it's really crucial to calculate your LTV in the service business. It's also important to know your retention rate (how many clients are repeatable and estimate their NPS by the end of the project). Thank you, Saj, as always, you're the best!
This is key. I don't advertise at the moment, so every time I get a word of mouth referral (90% of my new clients) I recognize the incredible value that brings to my business considering I also didn't have to spend any money directly to acquire that client.
Love the business talk
Love this concept, thank you!!! Also LOVE that you spell it out in the comments section as well, thanks for doing that. 👍
I like watching your clips. You give a little bit more than the others.
Hey Saj, can you make a video on converting from a video production company to a video marketing company? I’ve been making commercials for a marketing agency while being white labeled and I am now trying to establish my own video “marketing” company. Love your videos thanks!
You would have to expand your focus and pitch results. Marketing agencies usually position themselves that way. For example, you would create the video, use it for organic reach, paid ads and getting direct results for the client. As a video company, the client is responsible for the results.
And you would want to switch to a retainer model. Marketing agencies typically have a 5-10k per month retainer per client. I’ll try to make a video at some point about this
@@Filmmakingmentor thank you
Are you currently just creating the video for the client and letting it grow organically? Or do you help them advertise it? I took your advise and niched down to creating videos for, home builders and contractors. Im trying decide what my most effective pitch to them would be. Sorry for all the questions you seem to be the only channel that has the answers I’ve been seeking.
I just focus on the video creation part. But something you can do is create the video for them and set up the ads for them across UA-cam/tiktok and help them get exposure. It would change your pricing and require more work than just making the video, but it’s another path. What I teach my students in my course is creating a value stack for a client. They basically get several videos for different marketing methods from one shoot day. Then, they have a better understanding on how to get results with the video.
I really appreciate your insight, thank you for making this series.
Your point is spot on, but bear in mind, Netflix is not likely going to survive in the future. They will most likely go bankrupt.
I think that’s more related to competition that is taking their market share. They still crossed a 100 billion dollar valuation level and my research was in 2019 when they were at the very top of their performance.
@@Filmmakingmentor Fair enough. But I could use another example to make a point. GoPro. They exist, but only just barely. But with that said, it does not take away from the point you are making. My point is try not to over estimate the value of a client of the future. Its not set in stone.
Personally, I think its better to have a Cost to Acquire a Customer. And a Cost to keep a Customer. I would keep them separate and try not to expense too much on gaining a new customer at a loss. But whatever I spend on that, keep investing that value into keeping a client you have.
Example. It cost $100 to gain a new one. $25 to keep on a basic level of what ones used to. Why not invest $50, or $75 to keep them. Maybe that's extra value added in future on going projects? Or maybe it comes in the form of a Thank You Golf Day or something like that to your expense. Even a dinner would suffice.
Remember, there is no Business Relationships. They're all Personal. Investing time and money on the more Personnel level might yield a keeper much longer then over paying to acquire a new Customer. You might be surprised by throwing a dinner and what it could do to influence future up selling on a later project. That is assuming they can afford it, and that you provide the value for them to be worth it. They just might agree to pay more to get more and will love you more for it. ;)
Wait… Netflix has been hemorrhaging money…
Netflix had 31 billion in revenue and 5 billion in profit last year and its still valued over a 100 billion. They are staying alive vs trillion dollar competition. So there is plenty we can learn from their business model
@@Filmmakingmentor Whoa!!! The report I read was less profitable. Could’ve been an older report.
I also want to say that I really appreciate your channel and all the help you’ve given me for free over the years. Thank you.
Barz!!!
Interesting, will be sure to apply this in the future!