Customer acquisition costs - This is a very useful method of
measuring your most effective method of customer acquisition.
Knowing the cost for each of your marketing
efforts will allow you to get more from your budget.
Do you know you how much it costs your organisation to acquire a
new customer?
This will also give you a good benchmark to measure new forms
of marketing.
Example:
If you spend £200 on a print ad in a newspaper or
magazine and you acquire 200 new customers your cost is £1 per customer.
If on the other hand you only attract one new customer, your cost is £200 per customer and there is no
guarantee that you will get any customers.
This is true for any type of marketing direct mail, telemarketing,
yellow pages, business directories etc.
Knowing these costs will allow you to identify your most
cost effective way to attract new customers and if you combine this
with the average lifetime value of
your customers.
The bigger the ratio of lifetime value over customer acquisition
cost the better.
You should always be looking to reduce your customers
acquisition cost by testing new ways to acquire customers.
Pay
only for results not for work
The more you can tie payment to specific performance results the
better.
You can have an unlimited budget if you pay only for results and
you pay less to acquire new customers than the value they are worth to
your business.
You should review any advertising that is equal or greater
than the lifetime value acquiring new customers or you can not measure
effectively.
Question whether you should renew any form of advertising or
marketing that you can not measure find a positive measurable reason
other than you have always advertised in that publication or this
directory.
Competition is getting so fierce that every area of a
business needs to deliver.
Once you know your acquisition cost it can be
used as a benchmark for testing new ways to attract customers.
Attracting new customers
online can be very cost effective and lower cost than many forms of
traditional advertising.
There are very few times when potential new customers will let
you know what products or services they are currently looking to
purchase.
One place is when they are using search engines to find products
and services they are interested in purchasing.
How many people are searching for the products or services you
business provides?
Most of these people will not know your business exists or will not
know you supply the items they require otherwise they would not be
searching they would be calling you.
This is a unique opportunity for you to advertise
information about your products and services directly to people you
know are actively searching for those products and services when they
are interested in acquiring them.
Many businesses have a web presence few can be found by
searching for the products and services they supply.
To achieve that web sites need to be structured with this objective
in mind and not use any design technologies that prevent search
engines indexing the information such as Flash animation, Frames
or some types of database design.
You need to know what search terms people are using to search for
the products and service you supply.
This is used as the basis for search
engine optimisation designing a site that will rank highly for a
given search term.
The commercial value of any search engine optimisation
depends on:
- How many people are searching?
- How much online competition?
- The time it takes to be effective.
- The cost of achieving a high ranking.
- The ongoing running costs.
- The rate at which the site converts visitors to customers.
One very quick and effective way of testing the effectiveness of
this kind of marketing for your business is to use: