As your customer acquisition cost lets you know on average how much your business has to invest in marketing and sales strategies and tools in order for your business to acquire a single new customer, the lower your business’ customer acquisition is, the better! As the lower this number is, the more effective your marketing and sales tools and strategies are and the more money that your business can afford to spend on other facets of your growing business. If you want to decrease your customer acquisition cost, continue reading!
How to improve your customer acquisition cost:
First of all make sure that you’ve calculated your customer acquisition cost using the proper formula:
The formula to workout your customer acquisition cost isn’t that difficult. Simply add up how much your business spends on marketing and sales to new customers in a single year and calculate how many new customers you’ve managed to acquire over the same period. Next, divide your second figure, which is the amount of new customers which you have acquired by your first figure, the amount which your business has spent on acquiring new customers in the past year. So if you’ve used an incorrect formula to try and work out your customer acquisition cost, it’s well worth recalculating it, in order to get a more accurate answer.
Set a goal to increase your website’s conversion rate:
For example, if you pay for a large marketing campaign and your campaign is seen by a large audience but for one reason or another, your business fails to increase its sales, you have a problem with your business’ conversion rate. So you should set a goal of increasing your conversion rate and turning hits to your business’ website into finalized sales from brand new customers who have seen at least one of your business’ targeted marketing campaigns. For example, if your business’ current conversion rate for hits to its website is 7% you may want to work on doubling this figure from 7% to 14%. Which will see your business is good stead!
Analyze data from each specific marketing campaign:
Did you know that it’s possible to analyze key data from each specific marketing campaign to see whether there are specific reasons why a specific marketing campaign may have failed or succeeded. For example, if you choose to pay for a Facebook campaign you can look at the statistics of how many individuals saw your advertisement and how many customers actually clicked on your link and visited your website. You can also see the customer acquisition cost for a specific advertisement. To see how much it costs to market your business to each Facebook user who clicked on your link and visited your website. Which you may also find insightful and useful, in deciding whether or not Facebook advertisements are effective for your business or not.
So if you’re unhappy with your customer acquisition cost and believe that it’s too high, there are numerous ways that you can work on decreasing it for succeeding in your business niche.