How To Lower Your Client Acquisition Cost
How to lower your client acquisition cost
The whole purpose of search engine marketing is to attract new prospects and buying customers. In certain cases however, your sales could become limited, for the simple reason that not everybody is seeking the products or services your company offers. Across the World Wide Web, if there are only 6,000 searches a month for the keywords �industrial pump rebuilding�, it will be hard for you to make more people search for that keyword phrase when Wordtracker tells us there has been only 6,000 searches for those three keywords in any given month or period.
Even if you were to buy the keywords �industrial pump rebuilding�, you cannot expect them to appear more than about 6,000 times a month, which will limit your page impressions to that same number of 6,000.
One efficient way to turn around this problem is to lower your client acquisition cost (CAC). If you can successfully achieve that goal, it will effectively boost your ROI for the search engine marketing campaigns you are currently managing.
The breakeven point
If your company sells a product for $25, there is normally a percentage or dollar amount of that total price which is profit. Using information from your search engine marketing ad campaign, if you actually spend $25 on advertising, you will actually need to acquire at least one new client at $25 just to break even.
In such an example, $25 would be your maximum client acquisition cost for this particular ad campaign.
Since search engine marketers usually want to maximize their ROI on their campaigns, to increase your profit level and by the same way reduce your CAC, some will try to reduce the unit acquisition cost set in this example ($25) to a lower level.
Importance of making some �road checks� along the way
Before committing any kind of significant ad budget to any campaign, an experienced search engine marketer will perform a few �road checks� along the way. This single step is critical to the overall success and ROI of your ad campaign, and will act as a �test-bed� for all your online marketing efforts.
One great way to start such a road check is by utilizing Google�s AdWords program. For only $ 5.00 you can set up a new PPC (Pay per Click) ad program, where your listings can appear within less than 30 minutes in most cases. Depending on your industry, and depending on the general level of competition there is in your market, it is suggested that you start with a low bid price, say fifty cents to a dollar. You might even try an initial bid price of less than fifty cents if you think it is appropriate to do so. This is one area where trial and error can actually save you money.
It is extremely important that you accurately monitor all of your road checks along the way, since you want to learn as much as you can from these tests. Failing to do this could seriously hinder your overall ROI later, once your ad campaign starts maturing.
More ways to �test-drive� your ads
As you delve deeper into your test runs, it will become more and more important to check your click-through reports (CTR) provided by your paid inclusion or paid placement search engine. Just log into your Google AdWords account and verify your number of clicks, page impressions, click-through rates and also check your single click fees for each and every keyword or keyword phrase in all of your ad campaigns.
One word of caution: CTR�s don�t always deliver the tell tale signs you need to discover or won�t always give you a true or accurate picture of your campaign profitability. The best tool to achieve that goal is to utilize a good ROI tracking system that will carefully monitor all your sales data, and produce individual reports for every product you sell on every search engine you are using, along with every keyword or keyword phrase used in your campaign.
Putting to work those conversion-tracking tools
No search engine marketing campaign can ever be complete or efficient without an accurate system of measuring conversion tracking. It�s great to get targeted traffic, but if those prospects don�t convert into buying customers, this will have a damaging effect in the overall profitability of any online ad campaign.
Today, most paid inclusion or paid placement search engine offers conversion tracking to most of their advertisers, large or small. Most of those tracking packages are good and can spell a marked improvement in a campaign.
However, if you are running many individual ad campaigns, spread across many different search engines, you should consider a third-party ROI and conversion-tracking tool available from a number of good vendors.
Conclusion
Significantly lowering your client acquisition costs for all of your online marketing campaigns can be easily implemented if the tips and techniques given in this article are followed. Remember that time can work for you, as it can very well work against you, if your competition is harder at work than you are.
Accurately measuring your ad performance against certain benchmarks you have developed in-house, by a third-party or by an experienced search engine marketing firm can make a big difference in the ROI your campaigns can really deliver.
Make good use of today�s campaign management tools available, either by buying the commercially available software needed for your application, or by using third-party management and monitoring programs offered for that task.
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Reference:
“Search Engine Advertising” by Catherine Seda.
347 pages. New Riders Publishing. Indianapolis, IN. 46240.
Author:
Serge Thibodeau or Rank For Sales
