New customers: Something we’re all after. But what does it cost to acquire them? Are our marketing efforts and promotions worth the cost? Such questions dominate the minds of marketers and salespeople alike, especially at emerging brands where tight marketing budgets must show a tangible return. So how can we measure the cost to acquire a new customer? It’s difficult, without question, but technology tools can make it a lot easier. If a product can be sold online, then we can use a combination of digital marketing, advertising, and promotions to measure new customer acquisition cost.
The approach is relatively simple: Make your product available for sale online at the venues that fit your brand profile and then use online advertising tools to drive sales. As the sales get going, compare the cost of the ads plus any promotional discounts against incremental sales…and there you are. By analyzing the data you can determine which customers are new versus repeat buyers. As usual, the difficulty is in the details. Developing and executing the right strategy, implementing measurement tools like tracking pixels, and testing various audience, creative, and promotion combinations are all complicated but critical parts of reaching the goal.
But wait, my product isn’t shelf stable, it’s frozen or refrigerated and so online sales aren’t an option! The capabilities are a bit more limited when you’re working with products that can’t be sold online, but you can use social media to drive traffic to online coupons and then measure redemptions (purchases). It will take a bit longer to measure the results, and you won’t have as much data, but it’s a good start.
The process discussed above requires a fair bit of iteration, trial and error. The first audience you target or the first promotion you run may not show the results you’re looking for. So try a variety of strategies and find what works!
9/6/2017
