25 Oct Customer Acquisition: The Right Funnel Strategy
Creating The Right Customer Acquisition Funnel
Without the proper customer acquisition strategy you may set your small business up for failure. The highest cost in business is customer acquisition cost so you must understand what is customer acquisition as well as customer acquisition cost and then establish a customer acquisition funnel that brings you great leads that convert into customers so you achieve business success. Let’s begin with some basics.
What Is Customer Acquisition?
Customer acquisition definition, according to www.businessdictionary.com is ” The process of persuading a consumer to purchase a company’s goods or services.” As a business mentoring expert when I begin the process of helping business owners look at customer acquisition I always start with actual customer acquisition cost. Surprisingly most business owners, regardless of industry, don’t have a good handle of the actual costs of attracting customers into their sales funnels. In fact their customer acquisition strategy usually is in need of a great deal of work and they are spending far too much money on ineffective marketing that doesn’t work. I call this “spaghetti marketing” where they are throwing things up against the wall and hoping they will stick to the wall. I prefer proven strategies and tactics which is why I use guerrilla marketing instead.
If we dig deeper into the definition of customer acquisition it is clear we also need to consider the cost of customer acquisition. The actual cost associated with acquiring customers is where most business owners throw away a great deal of money. As a business owner you need to know the dollar value a customer brings to your business over their life time.
Here is an actual client example of their customer acquisition cost formula:
Acquisition Cost Formula: XZY Consulting and Coaching Company
- Average customer is charged $1500 per month
- Average customer is retained for 12 months
- Average value of a customer is $15,000
- Average cost to bring in one customer:
Facebook ads: $1,000
Direct mail: $1,000
Fusion marketing: $2,500
Customer acquisition cost formula: spend $4,500 to earn $15,000 for a profit of $10,500 per average customer.
Are Your Customers Ignoring You?
The only reason your customers might be ignoring you and causing you higher and higher acquisition costs are if you don’t have a good sales funnel and if you haven’t taken the time to understand customer acquisition cost by industry. Every industry has different costs for acquiring customers and every business can improve the costs within their own industry.
Working to lower your costs and improving your sales funnel and getting customers to notice you by having a Core Unique Positioning Statement will assure your company stands out and you get the attention you deserve as well.
Check out some of these tools to get you going: