What’s your company’s customer acquisition costs (CACs)? These are important to calculate to figure out how much it will cost your company to find new customers. The process can be tougher when you don’t have any raw data to do that. Here are some factors to consider:
1. Cost per Customer
How much is your company spending to get each paid customer? Here’s another factor you should definitely consider. If the costs are too high then you should consider reducing your expenses or changing your acquisition marketing. Regardless of the steps, you take they should lower this figure.
2. Freebie Signups vs. Paying Customers
Here’s one of the main factors to consider to calculate customer acquisition costs. Freemium plans and free trials can be a great way to boost your company’s visibility and website traffic. Will all those visitors turn into paying customers? The bad news that’s not the case and the percentage that end up making an order can be quite low.
This is a key factor to determine whether you should adjust your CAC expenses. For example, if tons of people are signing up for freebies but few are placing orders then you should consider using other methods to boost your acquisition figures.
3. Cost per Acquisition
In other words, how much is your company spending on media for one website sign-up? If you’re spending a lot and getting little then you should definitely consider making some tweaks. This could include using different online channels and other steps. The main goal is to boost the number of sign-ups your Pathwwway Gamble site gets. It’s not really enough just to spend more on media. A better approach is to make sure you’re spending more wisely.
4. Website Visitors vs. Website Signups
Here’s another ratio you should look at when calculating your CACs. Your company might be getting lots of visitors but few conversions. If that’s the case then it’s important to consider changes to boost your conversions. The goal should be to get more visitors to complete the sales funnel journey. If people aren’t signing up to your website then you should definitely consider increasing your CACs to make it happen.
5. Customer Lifetime Value
The customer lifetime value (CLV) is a key factor to consider when calculating customer acquisition costs. This is an important metric and there are various online tools you can use to calculate it. This is important because it calculates how much your customers spend during their life cycle. This can help to determine how much you should be spending to find new customers. If the CLV is high then your company might determine that it’s worth spending more money for each new customer. However, if the opposite is true then it might not be worth making bigger investments.
These are some of the most important factors when startups are calculating customer acquisition costs. You should consider all of them to determine whether you’re spending too much or too little for each new customer.