One of the first steps in formulating an acquisition strategy is to calculate your Cost of Customer Acquisition (CAC). According to an article by Renee Warren, co-founder of Onboardly, on the Kissmetrics blog, “your CAC is loosely defined as the cost of all of your sales and marketing expenses over a given period of time, divided by the number of customers acquired in that window. While you won’t have a firm sense of your CAC until you begin acquiring customers, having an estimate will help you be prepared.” Estimating your CAC will help determine your optimal level of spending for such marketing expenses as search ads, re-targeting, sponsorships and other paid tactics. When it comes to analytics, Renee emphasizes the importance of measuring the right metrics; while vanity metrics like Facebook fans and Twitter followers might make you feel good, you should focus on the three most important metrics at each stage of your customer acquisition funnel to align your goals with actual results.
|Source: The YouMoz Blog|
After reviewing these articles, there are three action items you should immediately consider for your start-up:
1. Determine your Cost of Customer Acquisition: By estimating this cost, you can better forecast your customer acquisition expenses and justify your paid tactics.
2. Practice Content Marketing: The more value you create for your target customers, the more essential your brand becomes in their lives.
3. Test and Analyze Metrics: Only by quantifying and analyzing your successes and failures can you evolve and scale your business successfully.
While every business and product is unique to its market, there are some commonalities when it comes to understanding, engaging and growing your customer base. Whether your goal is to increase sales, free trials or newsletter sign-ups, these three proven tactics will help you strategize in the right direction.
Sangram Pradhan manages marketing strategy and product development for Ntensify, a mobile in-app merchandise business. He previously worked as a Creative Executive in the film industry, with positions at Sony Pictures Entertainment, The Film Department and United Talent Agency, specializing in acquiring and licensing IP. Sangram studies integrated marketing communications at Northwestern University and completed his Bachelors of Science at the University of Illinois at Urbana-Champaign.
Follow him on Twitter @srpradhan81