There are only 3 objectives of a communication, 1. To acquire new customers 2. To retain and increase the wallet share of existing customers and 3. To leverage the brand equity
For any business, the most important part is customer acquisition as it is often the costlier. It is said that customer acquisition is 5-20 times costlier than of that customer retention.
Here in this article we will talk about the things should be considered for customer acquisitions.
Customer Acquisition Cost: How Is It Calculated and Why Should You Care?
Customer acquisition cost, in the simplest sense, is the average amount it would cost you to get a new customer. It is sometimes called user acquisition cost, though. Or in another context, it’s the expenditure you would incur in convincing a potential customer to make a purchase from you. This cost takes account of everything from advertising cost, wages and salaries, maintenance cost, and every expenditure that goes into getting a new customer. To calculate your startup’s CAC, you simply add up all these costs and then divide it by the total number of customers you acquired over a given period of time. Take for instance company Doe, a fictitious SaaS company. Over a 6-month period, the company spent a total of $1,000 acquiring 200 customers. The CAC of company Doe will come out as $1000/200, equalling $5. Of course, this is a quick and dirty approach for calculating CAC as there are still many more variables that go into it. Going deep into details would be going beyond the scope of this post. But at least you got the point.
Why Should You Care About Your Startup’s CAC?
When you are able to precisely calculate your CAC, projecting your profitability over a long period of time becomes easier.
Moreover, when you know for certain how you spend on each marketing channel to acquire new customers, it makes it easier for you to also know where to double down your marketing efforts.
It’s that simple. What’s more, you will know how to reduce and keep it at the barest minimum.
With all that said, let’s go over cost-effective strategies any new startup can use to acquire new customers.
15 Cost-effective Customer Acquisition and Retention Strategies for Startups
Acquiring new customers is key to succeeding and staying profitable in business. To this end, here are 15 ideas you can use to get new customers for your business, and without hurting your ROI, and at the same time keeping your Customer Acquisition Cost (CAC) low.
1. Convert Your Website Visitors into Leads
2. Get on With Content Marketing
3. Attend Events and Tradeshows
4. Run an Affiliate Program
5. Master the Art of Creating Converting Landing Pages
6. Forge Partnerships with Complimentary Businesses
7. SMS Marketing Works
8. Promote your Business on Facebook
9. Create a Google My Business Page
10. Send Cold Emails
11. Open a YouTube Channel
12. Partner with an Influencer
13. Look into the Newspapers
14. Entice New Buyers with Coupons and Discounts
15. Try Transit Advertising
Acquiring new customers can be a herculean task, particularly for new businesses and startups. But with the strategies shared in the post, you can grow your customer base without spending so much that it hurts your business.
