I am going to share some tips on how you can reduce the cost of customer acquisition. If you are spending so much money on marketing or acquiring customers, then you are going to find this quite handy. So when it comes to customer acquisition and growing your business, there are two main metrics that are very important for us.
The first one is the cost of acquisition, which is how much does it cost you to acquire a customer or get someone to actually work with you? To do that, you need to consider your costs of sales and marketing.
The next important metric is the lifetime value of a customer, which is how much money that is likely to be made when you work with someone over the lifetime of you working with them. For example, if you work with someone for two years; it’s an estimation of how much money you make with that customer in two years.
To reduce the cost of acquisition, these are tips that can help you:
Number one is your targeting. You might have a really good offer but if you are targeting that offer to the wrong kind of audience, it does not matter. That offer is not going to convert properly and your costs of acquisition will be very high. Always make sure that when you are running traffic or ads, target your offer to the right kind of audience. That comes from understanding who your customer is & doing research. Who is your ideal customer? What do they want? What are their preferences? The best way to find out is to come up with a customer avatar, which is a really good description of your target audience.
Have a compelling offer
Number two is the actual offer itself. How is the packaging of the offer? Sometimes what we do is sell a client on one big transaction, but what about utilising small transactions. Instead of selling one big thing, what if you offer something for free? Case in point, these free videos that I make. You could offer something like a lead magnet, which is something that you give people for free. Allow them to enter their contact information for them to be able to receive it and/or get more information from you. Another example is an introductory offer that doesn’t cost a lot of money, but allows them to experience how awesome you are and then you can sell them more as they continue to work with you. Also, the messaging of the offer is important. In your messaging, make sure that you are always capturing their pain points and have them feel that what you are putting out there is actually for them.
Reduce perceived risks
Number three is reducing risks. For your offer to convert better, the risk involved with taking up your offer has to be lower than the perceived value. A way to reduce the risk is offering warranties or some form of guarantees (if you can afford to have guarantees). Consider social proofing, which is testimonials or ways for them to feel like “okay, I’m not the only person who’s trusted you and another human being has actually spent time and money in working with you, so you must be awesome, right?”. Remember, the offer is an aspect that we always have to keep troubleshooting and testing to see the effect you have in increasing the conversion and reducing the cost of acquisition. A lot of times when I talk about offer, people tend to think I am talking about the actual product you are selling. However, I am referring to what you put out in the market.
Send your leads to the right place
Number four is where to send the leads. Are we sending them to a landing page? How is it like? Is it responsive? What are the calls to action in that landing page? A call to action means to give them clear instructions on the next thing that should be doing. Therefore, you want to make sure that your calls to action will lead them to the right place. A lot of people make a big mistake by spending so much money on advertising and then they send people to your website, but there is so much clutter that it causes them to get lost & confused.
Have a good funnel & follow-up process
Number five is your funnel and follow-up process. A funnel is taking someone through a step by step process in the journey process. So you might start off with someone downloading something for free. Then you might capture their information in your database. You proceed to nurture them & continue to add more value until they are ready to buy or able to move to the next step. So having a funnel and some good automations behind the scenes can help you increase your conversion. The more you convert, the more your cost of acquisition goes down.
Tweak your tech
Number six is to tweak your tech. So you might have everything working for you, but the tech fails you. This is normally a bit complicated because this is something that might be beyond your hands. Talk to your tech specialist and make sure that all your systems are tested properly before you start sending so much traffic to them. So don’t let the tech fail you.
Monitor your lead sources & channels
Lastly, look at your lead sources & channels. For example, are you using Facebook ads or Google advertising like Google Adwords etc. Always keep monitoring your different channels and lead sources to try and find out what is working the most. If you find something that is working better, then do more of it.
So there you have it, remember.
- Target the right audience
- Have a compelling offer
- Reduce your perceived risks
- Send your leads to the right place
- Have a good funnel & follow-up process
- Tweak your tech
- Monitor your lead sources & channels
If you need more tips on how to generate leads and grow your business, keep following Client Generation Strategies.