Sales & Marketing Manager
How Much Are Your Customers Worth To Your Business?
Every business owner is familiar with these three common concepts:
● Retaining customers is cheaper than acquiring new ones
● Eighty percent of your revenue comes from twenty percent of your customers
● The best new business is referral business
It’s clear that keeping customers and developing customer loyalty brings remarkable value to a company. It is certainly one of the primary reasons behind any auction company’s success and long-term sustainability. Your unique customer base is what differentiates you from the competition, creates barriers to entry within your market or niche category and ultimately helps maintain and even increase your profit margins within a crowded market.
We all know your customers are one of your most valuable assets, but just how much are your unique customers worth to your business, and, what is the real long-term cost to your business of sharing your customers with a third-party marketplace or white label bidding platform?
To offer some insight into this, we have broken down what each single user using the services of a selection of companies is worth to that company. To calculate this, we have taken the company’s market capitalisation or recent valuation and divided that number by the most recently reported number of active customers or users.
Amazon – $3,000 (£2,314) per registered customer
The company which is famously guided by four principles: customer obsession rather than competitor focus; passion for invention; commitment to operational excellence; and long-term thinking. Amazon reported 310million unique customers in 2018 which with a market cap of a whopping $930bn equates to $3,000 per customer.
Ritchie Bros – $700 (£540) per monthly unique visitor
The world’s largest industrial auction company boasts more than 5million monthly unique visitors and a market cap of more than $3.5bn.
Autotrader.co.uk – £480 ($622) per monthly unique visitor
The UK’s number 1 website to buy and sell used cars Auto Trader reports 11million monthly unique visitors and a market cap of £5.3bn. The company reported a 67% operating profit margin in 2018
Rightmove – £348 ($451) per monthly unique visitor
The UK’s largest property website Rightmove reports an average of 14million monthly unique visitors and a market cap of £4.9bn. The company has come under pressure in recent months since increasing prices by as much as 20%, helping the company to achieve a 74% operating profit margin in 2018
1stDibs – $333 (£257) per registered user
The self-proclaimed ‘world’s leading online marketplace for rare and desirable objects’, privately funded 1stDibs boasts more than 1.5million site registrants and a valuation of more than $500m after securing $76million in funding from investors including Christie’s owner Group Artémis.
eBay – $181 (£139) per registered user
The multi-national online marketplace famous for connecting buyers and sellers via Auction, Buy Now and Make Offer, eBay has amassed an impressive 180million registered users since its inception in 1995. With a healthy 20.7% operating profit margin in 2018 eBay has a market cap of $32.5bn.
When considering the value of your customers to your business it is helpful to remember that rarity and exclusivity are vital. By sharing your customers with a third-party platform, either within an auction marketplace or a White label auction solution, you are relinquishing ownership of that customer to a third party, who in turn is able to increase their number of customers and ultimately increase the value of their business.
Only by utilising an independently developed or bespoke Private Label auction solution can you ensure that your business retains total ownership and exclusivity of your customers and in turn benefits from the increasing value of your business.
Bidpath, the leading global auction technology company, partners with auction companies to develop bespoke Private Label auction solutions. Designed to help auction companies grow their brand, own their customers and control their data all from within their existing website. If you are interested in learning more about how Bidpath can help your business, then please contact James Fuller-Thompson today.