Today if you do just one thing in your business I want you to make it this. I want you to get clear on exactly how your businesses marketing channels are performing, the results that they are delivering and the cost of each.
When I talk about the cost I’m not talking about the overall investment you’ve made in a channel though. I’m talking about the cost of actually acquiring a new customer from each particular channel that you’re investing in. This could include digital, print, television, direct, referral or even a major event.
This is known as the cost of acquisition and it’s the marketing metric that matters most. There are others that are important to consider as well but I’m not going to focus on those here.
Let’s take a look at a real life example and compare two marketing channels popular with small business owners.
Search Engine Marketing vs Print Advertising Cost Per Acquisition
Jack, a small business owner invests in Google search engine marketing (SEM) in order to connect with prospects who are specifically searching online for his businesses products, services or related information.
Google’s reporting allows Jack to determine exactly how much it’s costing him to have a prospect arrive at his website from the search engines or to call his business directly from the search results page. It’s also possible for Jack to understand how many of these prospects are converting into a conversation with his sales team and subsequently a purchase. Using this data he can calculate the cost of acquisition or if he’s got a sweet setup view it automatically in real time as its happening.
Once Jack understands the cost of landing a new customer from the search engines he can then consider and compare the investment he’s making in print advertising within a publication popular with his target market.
Jack may have made an investment in one, or a series of advertisements. These advertisements could be seen by one of the many readers of the publication, who hopefully… if the stars and moon align will perhaps have an interest in what Jack’s offering or talking about in his advertisement. From here the reader or prospect might call Jack’s business or visit his website.
But how will Jack know that it’s the print advertisement that delivered the prospect to his business and that it should be attributed as the catalyst for the prospect interaction and later on hopefully conversion or purchase?
Now it gets a little tricky because unlike with search engine marketing there’s no automated insight into performance with print advertising however Jack can develop an approximate understanding if he’s clever and considered in his approach as a business owner. Whilst it’s not an exact science he can use a different phone number that’s tracked, unique web address with corresponding landing page or even provide an exclusive offer via the advertisement. He could also ask prospects and customers how they heard about his business however this is less than ideal!
From here Jack can manually calculate the cost of acquisition from print advertising. He can then review and compare this with the performance of his investment in search engine marketing to ensure he’s getting the most bang for his buck!
Review and Compare Marketing Channels For Best Results
Once you have visibility and insight into the performance of your marketing channels you can work out your cost of acquisition or the exact dollar bills on average you have to fork out every time you land a new customer from a channel, you can then review this data regularly. And it needs to be regularly as it will change due to factors like competitor activities, trends and consumer behaviour. A channel that once delivered a customer at a low cost for your business may suddenly become expensive.
Understanding Your Investment and Fuelling the Growth of Your Business
Marketing channels have the ability to fuel the growth of your business by delivering new customers and revenue. It’s important that you understand each channel’s specific impact and how the results you’re getting from one channel compare to another. This leads to insight and enables great decision making. And great decisions lead to better outcomes and better business performance.
Need help understanding which marketing channels offer your business the lowest cost per acquisition? Get in touch with Digital& here.
IMAGE > Daniel Walbidi, Winpa (2007). Synthetic polymer paint on canvas, 201 x 137 cm.
Recent Comments