How much is a new client worth to your local business?

As a small business owner each new client entering your store can make a big difference to your revenue at the end of the month. But what is their value?


Video transcript

How much is a new client worth to your local business?

Today is going to be a bit of a different Q&A session since I am the one who will be asking the question to all the small business owners who are watching this.

Have you ever wondered how much a new client is worth to your local business? If you are a serious entrepreneur then surely you must have a vague idea.

It’s fair to say it will vary upon the type of business you’re in.

If you are running a coffee shop a single client will not bring as much money as a hairdresser would, but they are very different business models at the end of the day.

If I use the example of a hairdresser for instance, according to a study conducted by L’Oreal “around 68% of clients stayed loyal to their hairdresser and have not visited any others in the past year.”

This is great news if you are a hairdresser. The biggest challenge is how do you get the clients in the first place?

Well, localised online marketing of course.

Let me give you a little demonstration on how you can check how much a new client can bring to your business.

Using the google keyword research tool I actually checked the number of times the keyword “hairdressers” is searched in the Croydon area near London.

According to google this keyword is searched about 140 times a month in that particular area. This is bearing in mind google tends to be very conservative with its numbers. Google also reckons it will cost you around £2.00 for every click you receive if you were do a paid campaign just using this word.

Ok now let’s do a bit of maths.
You’ve created your advert and are targeting the word “hairdressers”. Let’ say for argument’s sake that out of those 140 people searching for Hairdressers in Croydon around 60 of them have clicked on your advert. That will cost you a hefty £120 altogether which sounds like a quite lo money.

But wait! Let’s also assume that out of those 60 visitors about 5% of them (that’s 3 people) decide to make an appointment in your salon and that each visit will bring around £45.00. That adds up to a total of £135 in revenue. Which means that you will be making a £15 profit.

I know what you are going to say £15!!! Is that it? NOOOOOO. Remember the Loreal study. 68% of clients stick with their hairdresser for at least a year. So out of our 3 clients we are likely to keep 2 of them for a whole year.

If each of them come back to visit 6 times (every two months) within that same year that will bring an additional £540 a year to your business, all from setting a paid campaign for one month and only targeting one word.

So your initial investment of £120 would have returned £135 to start with plus an additional £540 from repeating visits which bring the total to £675 or just over £5.60 for every  pound you would have spent. Not bad hey.

I can only let you imagine what additional potential revenue you could generate when you target multiple keywords.

And I am not even talking about potential halo effect such as word of mouth if your new clients are satisfied.

I’m only using the “hairdressing” industry as an example but you can do this for any types of business.

Google is not the only option either and you may find advertising your business locally on other platforms such as Facebook, are more cost effective for you.

In this example I have tried to use numbers which are as realistic as possible to demonstrate the power of online marketing for a small business.

The point I am trying to make here is, don’t focus on the cost but on the outcome. See it as an investment.

Internet marketing is by far the most cost effective way to promote your business locally and you can literally get new customers overnight, why wouldn’t you want to do it?. You’re likely to make some mistakes along the way but it doesn’t matter, that’s how you learn.

Last thing, If you are a small business owner and have any local online marketing  experience you’d like to share  just post a comment below as I am sure it will be very valuable to everyone.

In the meantime if you want to ask me a question go to, and I’ll be happy to help.


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