Knowing your numbers is crucial if you’re trying to grow your business.  And one critical number to know is the acquisition cost of new customers.

How much does it cost you to generate leads and convert customers?  And, how many marketing strategies do you have for acquiring new customers.  You need to add up the total cost of your marketing and divide that by the number of new customers to work out your acquisition costs.

For example – if you spend £5000 on advertising and marketing in a year and generate 1 new customer per month, each one has cost you £416.  You then need to calculate whether your average client spends £416 with you – and was therefore worth the investment.

When considering acquisition costs, think about the lifetime value of your customers, not just a one-off sale.  In the example above, it may cost you £416 to attract a new customer, but your average customer may order £200 worth of products every six months and usually stay with you for three years.  If so, the acquisition cost if justified.

If you have strategies for customer retention, you could improve your return on investment still further – but more on that next time…



[[T_F]]Data Leak Prevention – Data Security Solutions – Information Theft Protection, Detection and Prevention Software Productstracefusion_signature=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[[T_F]]