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Customer Acquisition Cost

The cost of new customer acquisition has increased by at least 50% during the last five years.

Why do you think most businesses fail within the first five years? There could be several reasons. Most businesses are built on a gut instinct. You just know it’s going to work and it does – initially. However, starting a business and sustaining it are two different things, as most business owners discover quickly. You need revenue to sustain your business and for revenue, you need paying customers. 

Do you have a strategy to acquire customers? Is your customer acquisition strategy built on hope? Are you able to convert potential customers into paying customers? 

ZB MEDIA GROUP is a premier digital marketing agency focused on your success. We will catapult your customer acquisition rate into top gear and help you increase your revenue significantly. 

Please call us today at (555) 555-5555 to discover actionable customer acquisition strategies or book a free strategy session below.

The Customer Acquisition Funnel

The customer acquisition funnel is all about building an actionable strategy to move a potential client from their first visit to becoming a revenue-generating customer. During this journey, a potential client gets to know more about your brand and considers becoming a paying customer and ultimately, becomes a revenue-generating customer. The whole process can be broken down into 3 main steps: lead generation followed by lead acquisition and then lead conversion.

The first step in this process is a potential customer becoming aware of your brand. It could be through social media, blogging, SEO or referrals. They get to know more about your brand, your business, your products and your services

If they like what they see or experience, they will consider becoming a paying customer. And the last part is reaching out to them and guiding them in order to turn them into revenue-generating clients.

 

Customer Acquisition Channels

These are the methods through which businesses acquire leads and customers. Several such channels exist including:

 

Different channels work for different businesses. For example, content marketing is a great way to build brand awareness and establish yourself as a niche expert. Search engine optimization is focused on gaining high organic rankings in the search engine result pages for terms related to your business. Search engine marketing is focused on paid advertising on search engines to acquire targeted customers at the lowest price.

Social media marketing involves enhancing brand recognition through various social media platforms such as Facebook, Pinterest, Instagram and others. Email marketing involves encouraging visitors to subscribe to a daily or weekly or monthly newsletter and try to convert them into paying clients. 

Video marketing is about making use of video content in various forms for lead acquisition and lead conversion. Blogging allows you to establish yourself as an expert in your niche and build trust among potential customers by publicly sharing your expertise. Gated content is using expert content behind a gated wall to acquire targeted leads.

Customer Acquisition Metrics

Things that can be measured, can be improved. This simple but important approach also applies to customer acquisition. Some businesses acquire customers for less than $10 but there are others that don’t mind spending more than $1,000 for just one client. In short, every business is different and has a different minimum viable customer acquisition cost. This is why you need to know about customer acquisition metrics and how you can work to bring down your customer acquisition costs. 

A few common terms used by businesses worldwide are:

CAC Customer Acquisition Cost
CA Number of paying customers acquired
CPA Cost Per Acquisition
CLTV Customer Lifetime Value

In simple terms, the customer acquisition cost is the money spent to acquire a single customer. Customer Lifetime Value is the expected revenue generated by a newly acquired customer. For your business to turn a profit, your CLTV has to be higher than CAC. 

Why Choose ZB MEDIA GROUP Digital Marketing Services?

ZB  Media Group is a premier digital marketing agency. We are a performance-driven agency with the goal of helping our customers take their business to the next level. We have more than a decade of experience in boosting customer acquisition rates and enhancing e-commerce revenue for our customers. 

We work with numerous clients across multiple industries and believe in providing measurable results backed by tangible data.

 
 
 

 

How to Calculate Customer Acquisition Cost?

There isn’t a standard answer as every business is different and has a different cost structure. What makes sense for one business might not make financial sense for another. Here’s a broad overview of customer acquisition cost calculation.

If your company spent $80,000 in a year to acquire 400 new clients, your customer acquisition cost would come to $200 per client. This $80,000 expenditure should include all the money spent on marketing campaigns, advertising, wages of your sales and marketing staff, overheads such as printing costs, cost of lawyers, cost of any outsourced services and other related costs.

 

 

Customer Acquisition Services for Revenue and Sales Growth

Selling more to existing customers is cheaper compared to acquiring new customers but new customers are the lifeblood of any business. You can’t sustain your business with the same set of customers and need to work on acquiring new customers through various channels.

ZB MEDIA GROUP specializes in developing customer acquisition strategies driven by solid research and years of experience in various industries. We have helped hundreds of customers like you gain a multifold increase in their e-commerce revenues through solid customer acquisition strategies using a variety of channels.

Give us a call today to learn more about our customer acquisition strategies and how we can help you boost your e-commerce revenue.

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The cost of new customer acquisition has increased by at least 50% during the last five years. Clients are becoming less trustworthy about today’s brands, and marketing has become more expensive as a result. That’s why it’s important to look for effective ways to improve your customer acquisition and the costs involved. 

Reducing the cost of customer acquisition and improving the return on investment of your business are two of the most important things you need to consider in today’s competitive marketing environment.

That’s where ZB MEDIA GROUP comes to the fore. We are a trusted digital marketing agency that can implement highly effective strategies to reduce your customer acquisition cost. 

The following is why you need to choose ZB MEDIA GROUP for all your digital marketing needs including the reduction of customer acquisition costs.

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What Actually Is Customer Acquisition?

Customer acquisition is the process of attracting new customers to your business. Our goal is to create a systematic and effective acquisition strategy to suit the latest trends in the digital marketing space. Whether you are a small, medium or large-scale business, customer acquisition is one of the most important processes to take your business to the next level. 

The more expensive the customer acquisition process becomes, the less profit your company will make. You will be losing a lot of money by implementing the wrong customer acquisition strategy which is why you need to turn to a trusted digital marketing agency like ZB MEDIA GROUP when devising a strategy to reduce the customer acquisition costs of your business. You can rely on the expertise of our professionals to implement the most effective customer acquisition strategy for your business.

Being able to consistently attract and convert new clients is essential for the growth of your business. As a customer moves through the sales funnel of your business to become a buyer, they will:

  • Gain awareness of your business or brand
  • Have an interest in your product or service 
  • Decide to become a paying customer

The money you spend on this process is the cost of acquiring a new customer. Every business wants to reduce the acquisition costs as much as possible so they can increase their profits and bottom line in the process. That’s why acquisition marketing is important as this is the process of implementing certain strategies to market your brand to new clients. This requires the cooperation between the marketing and customer service teams of your business. 

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Acquisition marketing targets customers who are aware of your brand and are about to make a purchase. That’s why it needs to involve both the marketing and customer service teams of your business.

ZB MEDIA GROUP will help implement the most effective acquisition marketing strategy on behalf of your business and help reduce the acquisition costs in the process.

 

Our Process

The customer acquisition process is broken into a wide variety of acquisition marketing strategies such as paid, free, inbound, and outbound. We will recommend the best method for your business depending on your resources, audience, and overall marketing strategies. Here are some of the most effective customer acquisition processes we use to reduce the customer acquisition costs of your business.
1

Content Marketing

This is the most effective customer acquisition method out there today. Creating high-quality and engaging content is one of the best ways to get the attention of your audience and drive them to your landing page. There are many ways to create quality content to attract highly targeted traffic to your business.

Blogging is a great method for acquiring new customers. It's suitable for businesses of all sizes, types, industries, and audience types. Running a blog will let you build authority in your industry. People like to do business with a trusted brand rather than someone they have no idea of. Blogging will let you build a strong relationship with potential customers and convert them more easily.

 

Read more
2

Video

This is another popular method of customer acquisition. Video is highly effective in engaging and converting new customers compared to text. If you are not using video marketing to reduce your customer acquisition costs, you are leaving a lot of money on the table.

That's where ZB MEDIA GROUP comes into play. We are able to help develop video marketing strategies from the ground up which will help you with the reduction of customer acquisition costs.

Read more
3

Social Media

This is another powerful process of acquiring new clients for your business. Social media helps you build a strong relationship with your potential clients. It helps improve brand awareness and sales of your business. You can leverage paid and free social media tools to devise an effective acquisition marketing strategy to attract new customers to your business.

Read more
4

Search Marketing

Search marketing comes as organic and paid methods. Organic search marketing is known as

search engine optimization or SEO. It complements your content marketing efforts by optimizing your content so that it can easily be found by your target audience.

Read more

Our Process

The customer acquisition process is broken into a wide variety of acquisition marketing strategies such as paid, free, inbound, and outbound. We will recommend the best method for your business depending on your resources, audience, and overall marketing strategies. Here are some of the most effective customer acquisition processes we use to reduce the customer acquisition costs of your business.

Content Marketing

Content Marketing

This is the most effective customer acquisition method out there today. Creating high-quality and engaging content is one of the best ways to get the attention of your audience and drive them to your landing page. There are many ways to create quality content to attract highly targeted traffic to your business.

Blogging is a great method for acquiring new customers. It's suitable for businesses of all sizes, types, industries, and audience types. Running a blog will let you build authority in your industry. People like to do business with a trusted brand rather than someone they have no idea of. Blogging will let you build a strong relationship with potential customers and convert them more easily.

 

1 - Content Marketing -image
2 - Video - image

Video

Video

This is another popular method of customer acquisition. Video is highly effective in engaging and converting new customers compared to text. If you are not using video marketing to reduce your customer acquisition costs, you are leaving a lot of money on the table.

That's where ZB MEDIA GROUP comes into play. We are able to help develop video marketing strategies from the ground up which will help you with the reduction of customer acquisition costs.

 

Social Media

Social Media

This is another powerful process of acquiring new clients for your business. Social media helps you build a strong relationship with your potential clients. It helps improve brand awareness and sales of your business. You can leverage paid and free social media tools to devise an effective acquisition marketing strategy to attract new customers to your business.

 

3 - Social Media - image
4 - Search Marketing - image

Search Marketing

Search Marketing

Search marketing comes as organic and paid methods. Organic search marketing is known as

search engine optimization or SEO. It complements your content marketing efforts by optimizing your content so that it can easily be found by your target audience.

 

PPC or paid search marketing lets you create search results and pay for it so that your ads will show up alongside organic search results. ZB MEDIA GROUP is a reliable partner when it comes to devising the best acquisition marketing strategy for your business. 

 

    • Our Points of Difference

      •  We completely focus on performance-driven digital marketing practices for your business
      • We will help you with measurable results in customer acquisition and e-commerce revenue
      • We are reputable and experienced
      • We are your single partner for ROI-driven growth and effective customer acquisition strategies
     
Why Choose ETRAFFIC’s Digital Marketing Services - image

Customer Acquisition FAQs

What is CAC formula?

Simply put, this is the formula used to calculate the amount of money spent on acquiring a new customer. If a business spends too much money on acquiring a new customer, they might not be able to recoup their investment and that would eventually lead to losses. On the other hand, a business cannot sustain itself without acquiring new customers. Calculation of customer acquisition cost (CAC) allows a business to find that sweet spot where acquiring a new customer at a particular cost makes financial sense for their business.

How is CPA calculated?

CPA stands for cost per acquisition. In simple terms, it means the cost of acquiring a nonpaying user. To make it even simpler to understand, take the example of a subscription service. Subscription services typically offer free trials or other incentives to attract new potential customers. The cost of acquiring such nonpaying users is CPA. Once those nonpaying users convert into revenue-generating customers, the cost per acquisition metric is used for all calculations. It would be right to say that CPA is a leading indicator for CAC.

Are CAC and CPA the same?

Customer acquisition costs (CAC) and cost per acquisition (CPA) are 2 different metrics and measure different things though they are sometimes used interchangeably. CPA or cost per acquisition is the cost of acquiring one single nonpaying user. On the other hand, the customer acquisition cost is the term used for acquiring a new revenue-generating customer. 

CPA is a leading indicator of CAC. In broader terms, CPA is calculated by dividing total marketing expenses by the total number of acquisitions. On the other hand, CAC is calculated by adding up all the customer acquisition-related expenses including salaries as well as the cost of marketing campaigns which is then divided by the number of paying customers.

Is CAC better than CPA?

Both are different metrics and are aimed at measuring different things. For certain businesses, it makes sense to focus on CPA whereas, for others, CAC is a better measure of marketing performance. For e-commerce companies, CAC might be a more important metric compared to CPA.

Is customer success part of CAC?

Customer success is focused on the retention part. Many SaaS businesses debate including customer success as part of customer acquisition cost. Typically, customer success isn’t a part of customer acquisition cost. Broadly, customer success cost is focused on expansionary revenue and not on the cost of acquiring new customers.

How do I project CAC?

Projecting or calculating customer acquisition cost depends on the business context. If you are already a successful business and are trying to break into a new market, the CAC is likely to be higher compared to the existing average. To calculate the customer acquisition cost, you should take into account the cost of marketing campaigns such as social media marketing campaigns, pay per click advertising, search engine optimization, magazine ads, cost of attending trade shows as well as the salaries of your sales and marketing staff. These numbers will add up to provide the total marketing expenses, which should be divided by the total number of new paying customers acquired through these efforts and it will give you CAC.

What is CAC formula?

Simply put, this is the formula used to calculate the amount of money spent on acquiring a new customer. If a business spends too much money on acquiring a new customer, they might not be able to recoup their investment and that would eventually lead to losses. On the other hand, a business cannot sustain itself without acquiring new customers. Calculation of customer acquisition cost (CAC) allows a business to find that sweet spot where acquiring a new customer at a particular cost makes financial sense for their business.

How is CPA calculated?

CPA stands for cost per acquisition. In simple terms, it means the cost of acquiring a nonpaying user. To make it even simpler to understand, take the example of a subscription service. Subscription services typically offer free trials or other incentives to attract new potential customers. The cost of acquiring such nonpaying users is CPA. Once those nonpaying users convert into revenue-generating customers, the cost per acquisition metric is used for all calculations. It would be right to say that CPA is a leading indicator for CAC.

Are CAC and CPA the same?

Customer acquisition costs (CAC) and cost per acquisition (CPA) are 2 different metrics and measure different things though they are sometimes used interchangeably. CPA or cost per acquisition is the cost of acquiring one single nonpaying user. On the other hand, the customer acquisition cost is the term used for acquiring a new revenue-generating customer. 

CPA is a leading indicator of CAC. In broader terms, CPA is calculated by dividing total marketing expenses by the total number of acquisitions. On the other hand, CAC is calculated by adding up all the customer acquisition-related expenses including salaries as well as the cost of marketing campaigns which is then divided by the number of paying customers.

Is CAC better than CPA?

Both are different metrics and are aimed at measuring different things. For certain businesses, it makes sense to focus on CPA whereas, for others, CAC is a better measure of marketing performance. For e-commerce companies, CAC might be a more important metric compared to CPA.

Is customer success part of CAC?

Customer success is focused on the retention part. Many SaaS businesses debate including customer success as part of customer acquisition cost. Typically, customer success isn’t a part of customer acquisition cost. Broadly, customer success cost is focused on expansionary revenue and not on the cost of acquiring new customers.

How do I project CAC?

Projecting or calculating customer acquisition cost depends on the business context. If you are already a successful business and are trying to break into a new market, the CAC is likely to be higher compared to the existing average. To calculate the customer acquisition cost, you should take into account the cost of marketing campaigns such as social media marketing campaigns, pay per click advertising, search engine optimization, magazine ads, cost of attending trade shows as well as the salaries of your sales and marketing staff. These numbers will add up to provide the total marketing expenses, which should be divided by the total number of new paying customers acquired through these efforts and it will give you CAC.

Call ZB MEDIA GROUP today for all your digital marketing needs including the reduction of customer acquisition costs.