In the interest of efficiency and performance. More and more companies are paying particular attention to a key indicator of their economic activity. The cost of acquiring a customer. With the rise of Internet commerce and the raging battle between advertisers. To be visible to consumers. All the more important to properly control advertising investments and marketing actions.
But what exactly is customer acquisition cost (CAC)? This key indicator corresponds to the price you pay to acquire a new customer. In its simplest form, it is calculated by dividing the amount of total investment in acquisition by the total number of new customers over a given period. An index not to be confused with the cost per action (CPA) which corresponds to the investment necessary to convert a customer, in other words how much a sale costs you, without any distinction between old and new customers.
Why controlling your CAC is so important? On the one hand because it is the key data studied by investors to determine whether a company is profitable or not. On the other hand because your goal is profitability and profit. If your investment costs in customer acquisition are reduced, then your profit margin will be higher.
But if knowing the cost of acquiring a customer is essential, the challenge lies in controlling it and above all in improving it, in a context where the cost of advertising insertions continues to increase. The more efficient you are in your method of prospecting and converting prospects, the lower the cost of acquisition. So how to improve this famous CAC? We give you some keys in this new article!
Mastering your CAC through the precision of the calculation
To properly calculate your CAC, it is not enough to know the formula. And although many entrepreneurs evaluate this indicator in a non-rigorous way, if you want to improve your profitability, you must be rigorous and precise in your calculations.
Indeed, behind the investments made Bolivia Phone Number List to acquire a client are hidden multiple expenses of which you are sometimes not even aware. The most important to consider are of the order of three:
Marketing investments : advertising insertions, adwords campaigns, promotion of posts on social networks, retargeting campaigns, emailing campaign, remuneration of an influencer partnership, etc.
Human costs : salaries and bonuses of your marketing teams.
Commercial costs : costs of equipment, software, service providers
Added to this is the complexity of customer tracking. You will certainly want to calculate the CAC for a given advertising campaign or a specific channel to assess its actual performance. However, a customer can make a sale after being exposed to one, two or more advertising campaigns.
Example: a customer receives an email Gulf Phone Number promoting a product. He clicks to go to the site, inquires, but does not buy. Then, a retargeting campaign will push him the product in question on his Facebook news feed. There he will click and buy. The sale will therefore be the result of two separate campaigns.
Under these conditions, obtaining a very specific CAC is a headache. But you will still have an overview of the channels that work best for conversion.