Calculator · 3 minutes

What Is a Customer Actually Worth to Your Shop?

Almost every bad marketing decision a shop makes comes from not knowing this number. Once you do, judging whether a $299 service or a $1,200 ad budget makes sense stops being a gut call.

How to read the result

• Lifetime revenue — What one customer spends with you over the whole relationship. Useful for perspective, but don't spend against this number — it's revenue, not profit.
• Lifetime gross profit — The number that matters. This is what a new customer is actually worth to you after parts and labour costs.
• Sensible acquisition ceiling — A common rule of thumb is spending up to a third of lifetime gross profit to acquire a customer. Above that, growth gets fragile fast.
• Break-even on a monthly service — How many new customers a month a given spend needs to produce to wash its face.

What most shops get wrong

• Judging marketing on the first job — A new customer who spends $300 on a brake job looks like a loss against a $299/mo service — until you count the four years of visits behind it.
• Ignoring retention — Adding one visit a year per existing customer is usually cheaper than acquiring new ones, and it moves this number more than any ad campaign.
• Counting revenue instead of profit — Spending 30% of revenue to acquire a customer is very different from spending 30% of gross profit. Use the profit figure.

Run this before your next conversation with anyone selling you marketing. If they can't tell you roughly how many customers their service needs to produce to pay for itself, that's useful information about them.