If you ever really want to become an effective advertiser, it is CRUCIAL that you calculate the lifetime value of a customer. Most small business owners think only about how much a customer will spend on a single transaction. That's good news for you, because it means most of your competitors are running ineffective ads, so there's more opportunity for you -- if you know how to do it right!

Always calculate Lifetime Customer Value (LCV), which includes repeat business and referrals - and not just your average single transaction amount. That can be a lot of money you'll want the first opportunity to capture before your competitors ever get a chance, right?

If you aren't considering the lifetime value of a single customer when you make your advertising decisions, you're making a HUGE and costly mistake.

If one or more of your competitors knows the importance of this calculation and therefore is more aggressive and smart with his or her marketing, they're attracting more new business than you and profiting a ton more from their marketing than you. How much longer do you want that to go on?

Calculating a precise LCV is a complicated, tricky and time-consuming task. The formula calls for you to examine all kinds of data about all of your customers or clients and make some fairly complex computations. But here's a simple way to "ballpark" your average LCV: just multiply your average sale times the number of times the average customer or client will buy from you over his or her lifetime (the average family stays in a location for 7 years). Then, add that amount again for every referral your average customer or client brings you.

For example, do you think it would it be worth it for a pizza place to offer a free pizza -- with no strings attached -- to every new mover who comes into their neighborhood? Your average local pizza shop owner would say "That's crazy - everyone knows one of the first things new movers do is order a bunch of pizzas! I'm not gonna give up the opportunity to get all that business if a new mover calls me because of my Yellow Pages ad!"

But that's just it - if that pizza shop owner isn't a savvy enough marketer to calculate his LCV, his Yellow Pages ad probably won't contain a compelling enough offer to get that new mover to call him. Especially if one of his competitors is smart enough to realize that this new mover may order $25 worth of food from a pizza place every week for the next five years. That's a total of $6,000 in business (not including referrals) up for grabs when someone first moves into the neighborhood.

If you owned a local pizza place, wouldn't you want the first chance to earn that new mover's business? What would it be worth to you to win them as a regular customer and get that $6,000? One pizza that costs you only a few bucks? Congratulations -- now you're thinking straight!

What's the LCV for YOUR business? Make sure you estimate it and keep it in mind when you decide how aggressive to be with your Yellow Pages advertising. If you think in terms of LCV instead of just the value of a one-time transaction, you'll be able to be more aggressive and therefore place a Yellow Pages program that gets a lot more of the new customers or clients in your area to come to you instead of one of your competitors.

Want to know some more simple and effective ways to turn your Yellow Pages into GOLD? My free 21-day email course at http://www.YellowPagesGOLD.com is filled with tips you can use immediately to increase your profits and improve your lifestyle.

Steve Sipress is an entrepreneur and expert in how to get more profits from the Yellow Pages and Internet Search Engines. He has helped thousands of small businesses owners increase their profits and improve their lifestyles over the past 20+ years. Get your FREE subscription to his power-packed Newsletter and FREE report "How To Mind GOLD From Your Yellow Pages" at http://www.YellowPagesGOLD.com