Businesses can’t survive and prosper without customers. In our intensely competitive environment, acquiring and retaining customers is part-art and part-science. Managing the customer acquisition process effectively is a key competency for web-enabled organizations.
The cost of customer acquisition (COCA) is one of the key metrics that are anchoring the growth of inbound marketing. Today, inbound and content marketing enables digital campaigns to attract website visitors and nurture them from interested leads to converted customers. The COCA metric is used to assess how efficiently you manage this process.
Calculating Your COCA
Your customer acquisition cost (COCA) refers to the price you pay to acquire a new customer. In its simplest form, it can be calculated by:
Dividing the total costs associated with acquisition initiatives by total new customers within a specific time period.
Do not confuse this metric with the eCommerce specific cost per action (CPA). CPA describes the costs associated with converting a customer (i.e. making a sale), whether by a new or an existing customer. COCA purely describes the cost of acquiring a new customer.
Improving Your COCA Performance
There are several options open to improving your business’ COCA within the context of your industry.
Here are seven simple strategies:
- Improve Conversions: Set up targets on Google Analytics and run A/B split testing with new landing pages, lead magnets, mobile visitor optimization, email marketing, and a refreshed checkout system to reduce your shopping cart abandonment rate.
- Reduce Customer Churn: Leverage your best customers as evangelists for your brand. Encourage testimonials, harness social media to engage with customers, and introduce customer satisfaction surveys and referral programs
- Focus Acquisition On Targeted Customer Segments: The more defined your target prospect is, the more efficient your targeting will be and the lower your COLA costs should be.
- Position Your Brand As A Thought Leader via content marketing. This generates leads without the cost of traditional marketing channels.
- Roll Out Marketing Automation: These tools improve lead generation and email targeting conversion rates and enhance analysis and reporting capabilities.
- Emphasize User Value: Surprise website visitors with unanticipated delights. Introduce additional feature and enhancements that your consumers have flagged interest in, whether it be improved products, up-selling or cross-selling to existing customers.
- Implement A CRM: Behind every successful company with repeat buyers is a CRM. Treat your customer like an asset and manage them both strategically and tactically.