Consider the cost of customer acquisition
Posted: Tue Dec 17, 2024 4:49 am
What do you gain by knowing your customer acquisition cost? Knowledge and control that allow you to optimize your budget. If what you are currently spending is more than 10% of the average revenue value per customer, you should reevaluate your budget to optimize it.
On the other hand, if your customer acquisition cost is very low, it is worth considering how to increase investment to attract new customers. You are probably wasting opportunities that will sooner or later have a cost.
To calculate the cost of customer acquisition, you add up the costs of marketing phone number list and sales staff plus marketing fees (agencies, campaigns, promotional materials, software, trade shows, etc.) and divide by the total number of customers. These should all be average monthly figures.
Identify the performance of your marketing channels
So far we've talked about indicators that will help you determine if your marketing budget is adequate, but how much should you invest in digital marketing?
The key is to determine the return and conversion of each of the marketing channels. It is important that when launching an initiative you determine how many customers or effective sales were made thanks to it. The more precise this is, the better.
At this point, digital is a channel with an advantage, because from everything you do there you get an exact record of the result in terms of lead generation and sales. So if what you are investing in digital at the moment does not bring you any return in this sense, it is time to change the strategy.
On the other hand, if the investment is showing potential to generate new customers and business, don't wait any longer. Calculate how much online channels can contribute to sales and, based on that value, establish the necessary investment.
A marketing director doesn't have to rely on the price set by a digital marketing agency - or the market - to determine how much to invest. If you know the average lifetime revenue value of your customers, the cost of customer acquisition, and have identified the most effective channels for attracting new customers, you're in the clear.
Not only will you know what the optimal budget is to undertake actions that really contribute to the growth of your company, but you will also be able to convincingly present/defend the marketing budget. What other tools or indicators would you recommend for defining digital marketing budgets based on your experience?
On the other hand, if your customer acquisition cost is very low, it is worth considering how to increase investment to attract new customers. You are probably wasting opportunities that will sooner or later have a cost.
To calculate the cost of customer acquisition, you add up the costs of marketing phone number list and sales staff plus marketing fees (agencies, campaigns, promotional materials, software, trade shows, etc.) and divide by the total number of customers. These should all be average monthly figures.
Identify the performance of your marketing channels
So far we've talked about indicators that will help you determine if your marketing budget is adequate, but how much should you invest in digital marketing?
The key is to determine the return and conversion of each of the marketing channels. It is important that when launching an initiative you determine how many customers or effective sales were made thanks to it. The more precise this is, the better.
At this point, digital is a channel with an advantage, because from everything you do there you get an exact record of the result in terms of lead generation and sales. So if what you are investing in digital at the moment does not bring you any return in this sense, it is time to change the strategy.
On the other hand, if the investment is showing potential to generate new customers and business, don't wait any longer. Calculate how much online channels can contribute to sales and, based on that value, establish the necessary investment.
A marketing director doesn't have to rely on the price set by a digital marketing agency - or the market - to determine how much to invest. If you know the average lifetime revenue value of your customers, the cost of customer acquisition, and have identified the most effective channels for attracting new customers, you're in the clear.
Not only will you know what the optimal budget is to undertake actions that really contribute to the growth of your company, but you will also be able to convincingly present/defend the marketing budget. What other tools or indicators would you recommend for defining digital marketing budgets based on your experience?