The Cost of Acquiring New Customers

When you look back on the traditional marketing methods you have used, it’s likely you’ve spent a large sum of money on advertising. In this digital age, your marketing funds should be slowly reallocated to different forms of marketing (many of which may be more cost-effective in the long run). There’s no getting around the fact that it’s going to cost you money to acquire new customers, but once you discover the most effective way for your business you can start to put more time and resources into that channel. Here are a handful of the costs that you might expect to pay when acquiring new customers.

Communication Costs

You need to consider the cost of communicating with potential new customers. Whether you’re sending them regular SMS updates, cold-calling or investing in an email platform to provide them with regular content, you will need to add up all your communication outlets. Once you have tried each method, you can see which has the greatest return on investment and use this as your chosen digital marketing method. Being aware of your lead generation costs will help you budget for the future and discover the best path for your business.

Social Media Costs

Although many social media platforms are free of charge, you may want to invest in pay per click advertising once you become more established in the online space. You will need to work out your cost per conversion and assess whether you’d rather use organic social media advertising or paid adverts.

Video Production and Promotional Material Costs

You should always think about the cost of promoting your business — whether that’s creating a marketing video for social media or printing leaflets and brochures. Hiring specialists to film videos, edit videos and design promotional material should ensure you have professional, high-quality colaterol, but you should work out production costs upfront to ensure the return on investment will be big enough to warrant the expense.

Marketing and Automation Costs

Automating your sales process will free up more of your time and create a more engaging experience for your clients. A personalised, streamlined approach to marketing will help you to acquire customers quickly and effectively, but you will need to consider the cost of setting up and managing your sales funnel. You may also need to factor in the cost of digital event management platforms too, if this is something you use regularly in your business.

Your previous customers will always be a huge asset to your business, so maintaining a strong relationship with them is important. The success rate of selling to a customer you already have is much higher than selling to a new customer; in addition, it can also cost up to five times more to acquire a new customer than retaining an existing one.

With that in mind, it’s important to understand the breakdown of costs for acquiring new customers. Consider whether you’d rather nurture your loyal clients or put more money and resources into marketing methods for client acquisition. A balance of both methods will allow your business to maintain a level of stability that will serve you in both the long and short term.