Throughout the Taking it to the Next Level program we have been breaking down and defining the fundamental skills and ideas of marketing as they apply to your Martial Arts business. Our focus, on professionalism, presented an angle from which to position your marketing to best highlight your school and present your location more professionally. But once you’ve strategized, planned, targeted and successfully sent your marketing out into the consumer base, when is enough- well, enough?

Deciding when any particular marketing campaign is no longer effective cannot be done successfully without first defining and understanding Customer Value. In my experience there are many school owners who don’t truly understand Customer Value and how it applies to every student in their school. I will cover Customer Value so that school owners can gain a better understanding of how their marketing campaigns can apply directly to generated income in the bigger picture.

Customer value
Customer value, or perceived customer value, is a very important concept to understand when deciding what marketing efforts are effective for your school. For instance – a special runs in a paper and the offer reads:

“$99 special! Two for one, includes the uniform!”  

Let’s say that the cost for you to purchase both uniforms is $40 and the ad costs you $150 to run.  If you’re only charging $99 and sign only one set of members from this special, is it worth it for you to run this ad? You must first look deeper into the meaning of customer value before making that decision. But what is customer value, and what makes any particular marketing effort worthwhile?   The immediate picture may say you ran the ad, it cost you $150, and you signed up two members, giving out 2 uniforms costing you $40.  The total expense to you was $190.  You brought in $99.  You lost money on the ad in the tune of $51.  If you bring in two people from the special you made your self $48 profit.  
 
Looking at the Bigger Picture

I approach this particular marketing campaign by looking at the same scenario in the long term.  I have signed up that one set of members and it has cost me $190.  But our ultimate goal at my schools is to transfer each of these students into one of our longer term programs, or at the very minimum a one year membership.  

By closely tracking my retention statistics I know that after a member joins, on average, that student will attend for two years.  So instead of seeing $190.00 for that particular marketing campaign, I am now looking at two $1500 per year or more dependant on the membership type. If they remain a member at my school for two years that one small ad will have made me $3000.  This is a bit more palatable for my investment of $190, isn’t it?  However there are a few factors that are overlooked in this situation, which also determines customer value. We need to factor in referrals, retail and special events.  
 
Finding Your Total Customer Value

Total Customer Value is defined by the total revenue realized from each individual student, for as long as they remain members of your school.  First you must determine the average retention time of your students and multiply this by your average yearly tuition. Further this by figuring out what else during their lifetime with you they should, or will be spending on other items: gear, drinks, special classes and clubs, and then add that to their tuition value. By determining these numbers you have found your Total Student Value. This now allows you a better vantage point from which to determine how much in advertising dollars it is worthwhile for you to invest in order to get new clients.  This will also help you to determine when stopping the run of any marketing effort is the best decision.

My advice to anyone deciding on marketing campaigns is to look at the Big Picture when making marketing decisions. Customer Value is only successful when supported by a steadfast structure in a school. Tracking Statistics, focusing on future sales potential and increasing retention through an exciting curriculum and term contracts also play important parts in the idea of Customer Value.

If you would like even more information on Customer Value and other successful business ideas, visit us at www.TakingItToTheNextLevel.com. If you have any questions, or would like to suggest topics for future emails, please contact me at Kyoshi@lininja.com or become a member of www.takingitothenextlevel.com. />