Jason worked hard in his business for more than two years and still he was struggling to pay his bills. He got some work through friends and referrals, but most of it came from advertising.

When I asked what kind of return he received from his advertising investment, he wasn't sure. Later he told me that for every two dollars he spent on advertising he received three dollars in work.

With that low return, he was essentially cleaning for no pay.

After subtracting the cost of advertising and the expense of being in business, there was nothing left for himself.

Surprisingly, Jason seemed unfazed by this information. He told me, "At least I'm getting new customers. The lifetime value of a customer is worth thousands of dollars."

When I asked if many customers repeated, he told me that the plan hadn't really started to kick in yet. Sadly, I doubt it ever will.

Assuming all customers repeat

I often hear marketing people teach the concept of the "lifetime value" of customers. They give examples of customers loyally repeating for years and referring friends to the business. This would be worth thousands of dollars over time.

The problem with these stories is that they imply that most customers repeat. This is not true. Only a small percentage of customers obtained through advertising will ever call again.

Companies that have been in business for a while can check their own records to see how few customers acquired through advertising ever repeated. Typically, fewer than 20 percent call a second time.

Jason had been led to believe that his new customers were going to repeat automatically. He assumed that he could eventually collect thousands of dollars from them. He used this assumption to justify a poor return from his current advertising investment.

Repeating customers are worth thousands

Some customers are worth thousands of dollars over their lifetime, but only if they repeat.

The value of the one-time customers is only the net profit from their one invoice.

In Jason's case, the lifetime value of most of his customers from advertising was less than zero.

Some repeat — some don't

There are two types of customers: Those who repeat and those who don't. Your success is based on finding and keeping customers that will call again.

In my early years of business, I thought that once customers experienced my outstanding workmanship, service and charming personality, they would line up to call me again. Even though many claimed they would call me next year, I never heard from them again.

Even if you have an excellent follow-up system, not everyone will repeat. It is the value system of the consumer that determines whether or not they will. Those who do not inherently value maintenance cleaning are not candidates to repeat or refer you to others.

I discovered that the quality of my work had little or no affect on changing their value system.

Know the ROI for your advertising

It is critical to know what your return on investment (ROI) is for every advertising dollar.

Most companies need at least a 2-to-1 return to avoid losing money on jobs obtained through advertising.

The fact that Jason did not know what his return was for advertising was a bad sign. Poor investing in advertising has been the downfall of many companies.

If you are getting poor results, you should modify the ad in order to improve your return or change to a different form of advertising as soon as possible.

Advertising produces few repeat customers

Only a small percentage of customers repeat as a result of any type of advertising. If a larger percentage repeated, a company's need for advertising would be eliminated entirely within two to three years. This just does not happen.

Repeating consumers are easier to acquire through other forms of marketing such as referrals and networking.

Hoping a customer will call you again does not justify running an ad that gets a poor return.

Customers need your help

Customers need to be reminded when it is time to clean, and how to contact you. If they cannot easily find your phone number to schedule their next cleaning, they may change companies just because they don't want to spend time searching for you.

A good follow-up system helps increase customers' lifetime value. It takes a while for customers to remember your company name, and they always need your assistance to remember your phone number. You need to help them.

Know which customers repeat

Jason is right to care about the lifetime value of his customers, but he needs to understand that some customers have a high value, while others have little to none. It is crucial for him to know which customers are likely to repeat and to give them more attention.

Advertising should be evaluated with the assumption that the customer will only be serviced once. Ads should be constantly monitored to ensure they continue to be profitable.

It is the lifetime value of repeating clients that is the main source of your profit and success. Be realistic about which customers have a high value and which don't. Focus your attention on retaining and getting more of the valuable clients.

Steve Marsh is the creator of the Be Competition Free Marketing Program. He is a 30-year veteran of the carpet cleaning industry, an IICRC-approved instructor and a Senior Carpet Inspector. Marsh is a marketing and business consultant who provides a turn-key program for attracting better customers. For more information, log on to www.BeCompetitionFree.com.