Everything Costs Money
If you operate an online website, forum, e-commerce site, or sell your services online, you may be thinking or branding, and target audience outreach. The problem with this initial thought process is that you aren’t a billion-dollar startup with money to burn. You don’t have investors banging your door down trying to get in on the ground floor. Those industries require massive ad and outreach campaigns because they can only be profitable with a significant cash flow.
Instead, you may be part of a shoestring budget looking to pull in as many customers as possible. This means that you need to keep your customer acquisition costs as low as you can so that you can spend your dollars on the products or services you sell. Even if you aren’t paying for the added marketing you are spending you time on it. As we all know, time is money, and money puts food on the table.
Gain customers by doing informational outreach campaigns. Find out what their issues are or specific needs for your niche product/service. This is invaluable information that can improve your business over your competitors and impress your target audience with your willingness to listen and change.
What are Customer Acquisition Costs?
Think of customer acquisition costs as the costs associated with everything you do that turns an average person in the public into a paying customer. This could entail, advertising, email newsletters, blog articles, updated websites, and added branding.
Customer acquisition costs are those costs that you spend to increase your customer base. The dollars could be used to increase exposure to your branding, or as more education advertising to those that know your services, or as general marketing campaigns.
You should never feel that your customer acquisition costs can be unlimited. A customer is only going spend but so much money on your site. Will they be buying for years to come? Or will they only buy one item? If you are spending on average $10 per person and only getting $15 dollars of income after unit expenses per person, then you are in the hole $5.
So, what are the areas that influence customer acquisition costs the most?
Branding and Messaging Costs are Hidden Costs
Everyone wants their own brand and their own advertising campaigns. However, that isn’t the focus at the start of the business. If you are just starting out, you need to instead focus on quality services and less on the digital marketing side. Branding has costs in time and finances.
If you do the branding yourself then you are wasting time on image creation when you could be providing more services to your clients. If you are constantly blasting email lists with messaging and such, then you aren’t improving your base but sending out emails that aren’t being read.
Often people are looking for “white label” suppliers, which they can use to brand with their logos and names instead of the supplier. Why is this an issue? It costs more. This increases your customer acquisition costs and decreases your margins on each sale.
Branding and messaging costs add up quickly, particularly when you don’t have a large customer base to begin with. The focus of the initial actions should always be on quality products and customer service for any marketing side of any entrepreneur.
Reach out in ways that show the customer that you don’t care about the common side of digital marketing. Focus on finding out what your customers problems, issues, and needs are. If you can see their needs from their perspective you will not only gain their trust, but also, you can create a better product or service.
