Kids like the idea of a dog — it’s a cute little playmate that’s always game for some fun. But, that’s pretty much where the forethought ends. Rarely will a child recognize the actual responsibility that comes with owning a pet.
The owner has to feed it, walk it, groom it, and clean up after it — not to mention a whole other list of not-so-fun duties. The key isn’t just having a dog; it’s doing everything possible to make sure the pooch is healthy and happy for years to come.
Building a solid customer base is no different. It’s never enough to just bring them in. You must do everything in your power to keep them with you. What’s more, the price to acquire and keep those customers must make sense for your business.
The Cost Of The Keeping Business
As soon as the rate to acquire customers exceeds the money they bring in, consider the fate of your company sealed — unless, of course, you can tip the scale back in your favor. Let’s say it costs $1 to make two of something; the cost to acquire is in your favor. But, if it costs you $2 to make one, then, politely speaking, your business is now hemorrhaging cash.
To get a better idea of what it takes to acquire a customer, take the entire cost of marketing and sales over a certain period and divide it by the number of customers you drew during that time.
How does that cost correspond with the revenue from each customer? Is it more or less? Even when the cost to acquire is less, many companies run into a snag or two. They fail to account for certain variables that drive up the cost to acquire business, retention being chief among them.
You can get customers through the door to make purchases, but how much does it cost to get them to return? It often costs less to retain existing customers than to acquire new ones. And by increasing the lifetime value of customers, you further reduce the acquisition fee.
Because your more seasoned customers are more apt to buy than new adopters, launching new products and services will, eventually, cost you less. Plus, your efforts to retain customers could lead to advocates and tremendous word of mouth for your brand.
How To Get The Most Out Of Each Dollar
For many startups, the biggest stumbling block is distinguishing the signal from the noise. You may put a couple of thousand dollars into the launch of an app and see some positive signs, leading you to think, “Oh, this is great; this is something we can continue doing over and over again.” But it may not be a true signal.
You have to consider sample size. You have to settle on the actual definition of acquisition. You need to look at channel and whether it works at scale. If you’re not considering any and all factors that can distort a signal, you’ll soon find yourself working with noise. Block out all the distractions and make sure what you’re looking at isn’t just a fluke.
So the question still remains: How do you keep the cost to acquire customers down while still encouraging growth? The following steps can help get you started:
Publishing content people want not only to read but also to share can be a struggle for many companies. You often find yourself spitting out post after post in hopes that something will eventually stick.
But for your product to stay consistently shareable, it must provide practical value to consumers. Identify customer pain points and get to know your audience’s wants and needs. Create something that addresses the strongest of these pains or needs, and expand out from there.
If someone finds your content interesting, make it as easy as possible to distribute. Pay close attention to those sharing buttons on your digital interface. Make them clearly visible in your website, app, or service to increase the viral loop.
Take it one step further, and ask your audience to share your content. Sometimes, a request is all that’s necessary to get people to distribute a post, guide, or video within their circles. Never be afraid to ask.
#2. Embrace legacy media.
Startups tend to shy away from more conventional marketing methods like print advertisement and radio spots. They’re often seen as either too passé or too expensive for a new company trying to break onto the scene.
While traditional media may no longer sit at the helm, it can add value. Just think of the potential reach. In terms of print marketing, a joint study by Two Sides and Toluna reports that 88 percent of adults comprehend, retain, and use information better when reading it via print.
According to recent data from Nielsen, 93 percent of adults still listen to the radio each week. Furthermore, radio listening usually takes place in the car, so your audience is a captive one. A well-timed radio spot could provide access to people you might not otherwise connect with through “new” media outlets.
Reconsider the likes of television, radio, or print. Find their place in your overall marketing mix, and use them to support your other marketing efforts. Our company has been dabbling with radio recently, and we’ve found it to be just as effective as it is inexpensive.
#3. Be nimble.
Signing a big contract to rely on some firm to manage your marketing efforts may sound like a good idea at first. It’ll lighten the load and allow you to focus on what you do best: develop your product.
But, most startups need flexibility. They need to change things month-by-month — if not week-by-week or minute-by-minute, even. Avoid signing a big contract with a PR firm. It’s not just expensive; it can indefinitely tie your hands and make you less agile along the way.
Whatever you choose to do to acquire customers, focus on the quality of your output. Make it relevant to their needs and easily shareable with their networks. Moreover, use every channel that makes sense for your business, even those channels not in the digital space.
So, have you used any one of these suggestions? Did you employ a different tactic that worked? Leave a comment below to talk about your experience.
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