Calculating Customer Acquisition Costs is very important. To sell a product, it is necessary to have a customer. However, to attain a customer sometimes you might pay a little extra. You want to allure a customer at any cost to buy a product. However, if the cost of attaining a customer is more than what you are selling, you are definitely at loss.
Customer Acquisition Costs: Calculation And Analysis
What is a Customer Acquisition Cost(CAC)? It is the cost that is borne by a company to make a customer. These costs may be advertising costs, offer and incentives cost, etc. If you divide the number of sales divided by new customers attained, you will get the CAC cost. For example; if the CAC cost is higher than the money you are making by selling a product, you are not doing well. You should not spend way too much to attain a customer, while you are not earning comparatively. So how to reduce CAC?
You must remove almost all barriers that are between the customer and your product. If the customer has easy access to buy your product, he will buy. However, if he has to face hiccups like long billing queues, he will not wait. He may abandon the product and walk off. According to a survey, if the queue is too long, the customer walks out of the store without buying the product. How would you reduce lines? Make payment possible anywhere in the store. There should be executives appointed and trained to bill the product anywhere in the store. You should also be open to all modes of payment.
Make Your Brand Accessible
Your brand should have an online presence. Use appropriate keywords. The buying process on your website of social media links should be simple. When a person is browsing online, his attention span is very less. Your brand should have the power to attract the customer to the website and he should leave only after purchase. Talking about retail stores, your brand should have a visual space. People should see it from anywhere in the store. The packaging and colors should be such that a customer gets attracted to it. You should also rely on customer feedback.
Try starting loyalty programs. According to a survey, it is easier to retain an old customer than to make a new one. If you have loyalty programs where you promise your customer to be rewarded against the purchase, he will repeatedly come back to avail of the offer. Keep the process simple. Allure him with rewards ad discounts. A loyalty card customer should feel privileged. This feeling will let him visit the store again and again. Referral programs are also a good technique. If they like the product, they will recommend you around them.