Focus on Customer Acquisition
In today's marketing efforts, it's simply not good enough to just blindly spend your marketing dollars without understanding what you are receiving in return.
You should always focus on Customer Acquisition, and especially the Cost per Acquisition.
In other words, yes that newspaper ad cost you$500, but how many customers did you acquire?
If you knew that the Ad sent you 10 customers then the equation is simply.
Cost ($500) / Customers(10) = Cost per Acquisition ($50)
In other words, the cost to acquire each of those 10 customers is $50 each.
Which one are you ?
- If you are selling $5 Pzza slices, then $50 is way too much to acquire the customer.
- If you are selling a $95 1-Hour massage, $50 acquisition is still a bit high, but atleast it's within reason and you can probably work on your Ad a little bit to try to improve your number of acquisitions.
- If the customer paid for a $250 consultation, then the $50 it cost you to acquire this customer is more than acceptable in terms of Acquisition and ROI.