|
What is Customer Acquisition Costs?
Customer acquisition costs are the marketing and advertising expenses needed to turn a prospective customer into an actual customer. This can include money spent to entice a visitor to a Web site or to a brick-and-mortar store to purchase goods or services.
What is a customer?
For information technology professionals, the concept of customer acquisition costs might sound straightforward. But in the New Economy, it can be as bewildering as entering the twilight zone, thanks to all the nuances of online customers. If your company runs a Web site that generates revenue purely by bringing in eyeballs to view banner ads, then a customer might be somebody who registers at the site rather than a casual browser.
In contrast, online retailers prefer to think of a customer as somebody who actually spends money. Companies must define customers on their own terms using criteria that drive their business goals
Who much customer acquisition really cost?
According to some other online retailers, customer acquisition costs are the amount of money spent on marketing that has been dedicated to customer acquisition, including general brand-awareness efforts such as posting a company logo on every search engine or portal from FindWhat.com to Yahoo!.
Customer acquisition costs are much higher for pure-play Internet retailers ($82 per customer) than for brick-and-mortar retailers that sell across multiple channels ($31 per customer), according to a survey of 221 retailers conducted by Shop.org .
Some analysts simply divide the number of dollars spent by a company per quarter on advertising and marketing by the number of customers attained during that period. However, that method fails to account for previous efforts to acquire customers and is "too short a snapshot" for determining customer acquisition costs. It's both wrong and naive for a company to count a targeted e-mail campaign as a specific avenue for attracting new customers, because it's possible that general brand-awareness efforts may have also had an impact.
How to Reduce Customer Acquisition Costs?
"Attaining visibility online is an elusive goal, especially through the major search engines. As web pages continue to proliferate, companies wanting to remain competitive will have to employ SpiderIT search engines strategies - especially if they're looking to complement and improve the impact of their traditional advertising and marketing efforts. SpiderIT proved and show clear path to profit, in addition to realistic and cost-effective customer acquisition costs."
Martin E. Rotstain, CEO
| 
