Many start-up small businesses look for an effective customer acquisition cost. In theory one can just easily purchase some leads, turn them to customers and make a profit.
Let’s presume that you have accomplished your goal by writing a great sales pitch or story about your product in order to turn prospects to buyers and make some sales. And let’s imagine that you have already made a few sales. But you may still wonder how to calculate the money that you have spent on each customer.
Here are some facts that you should consider:
- Customer acquisition cost: this means that you must find out how much money you are going to spend for getting a new customer
- How much is your budget? You should explore how much you are going to spend for advertising. Keep in mind that you have two options: Doing classic advertising or online adverting. Obviously many start-up businesses do not have enough funds to use advertising on TV, Radio and Newspapers. So they may use online advertising. Then again you need some monthly budget for Pay Per Click advertising. If you do it right and tweak your pay per click ads regularly, you may generate some traffic and sales. But for making sales you need strong sales pitch that can convert to sales. If you do not have pay per click budget, what are the other options? Free advertising.
How can you do free advertising when everybody is charging for ads?!
There are many options such as: blogging, free press release publication, content marketing, social media marketing, free classified ads and distribution. Creating blogs and writing your unique articles on blogs will increase awareness about you and your products or services. Some small businesses are afraid of promoting their services, because they do not want to be marked as spammers. Although there is a fine line between spam and free advertising, however as a small business owner you can easily realize when you are spamming or advertising. For example you can promote your business on communities in social media sites which are created for promoting products and services like yours. A simple search on Facebook, Google plus and the other well trafficked social media channels can show you such channels. You can also use Twitter for increasing prospects’ curiosity about your product or services. Make sure to interact with people on social media. I have seen many businesses, just throw their links online with a generic vague sale pitch and disappear without interacting with their fans and followers.
The Drawback Of Using Automated Submission Tools
Although in theory they make life easier for busy small business owners, but these tools have some issues. Apart from bug issues, they will trigger spam bots on social media sites and will hurt not only your product or service’s reputation, but also black list the URL you are using. Another issue is lack of interaction with prospects. Take some authors who promote their Kindle books online as an example: Unfortunately some of them use tools to submit their ads on social media sites. They not only miss out interacting with their prospect readers, but also will jeopardize their reputation.
Interaction in social media helps your prospects to understand your product better. If you can’t handle large base followers, don’t add them. If nobody writes comments on your social media sites, a simple “Thank You Note” will make a huge difference. Be gracious for their following and being there. People follow you because they are interested in getting to know you as a person. They are curious about your business. Show them who you are by sharing some posts which raise their curiosity so that they comment on your wall.
When it comes to sales, pay attention to your conversion rate. What does this mean? You should find out the percentage (%) of your web site’s traffic and visitors that you can monetize.
Explore the total traffic that your site generates per month and the traffic resources such as: organic search engine results, traffic from your videos, blogs, social media such as: Google Plus, Twitter and Facebook, landing pages etc. Make sure to calculate the traffic that comes to your websites via direct advertising as well. You must also find out the effectiveness of cost per click that you spend for your marketing campaign.
Write articles in your niche and publish them on your website, authority websites and social media platforms. Once you understand the content delivery channels and how they work, you’ll have a better idea on how to plan your strategies around them.
Offering small gifts to your audience will make a huge difference. This strategy creates repeat audience which in long run turn them to customers if it is done right. Many major player companies use this strategy to get customers such as: Google, Bing etc. These gifts can be useful tools, ebooks, providing a free online service and offline charity and fun events. There are many ways to impress your prospects.
When you calculate all these factors, you will be able to find out how much it will cost to get a customer for your product or service. This way you can aim at using less expensive tools and strategies of generating leads.
I have written more strategies in my book The Surprising Truth About Sales.
A Holistic Approach to Closing a Deal