Customer Acquisition – How much does it cost?

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It doesn’t matter how amazing your product is, you need customers to know about it. Your future investors are often far more interested in how you’ll sign up customers than the product itself…..
The internet has approx. 3billion people connected – that’s a lot of potential customers that you can now reach. The problems start in how to get their attention in a very noisy, crowded world.

Remember: customers are people who pay you

If your product is free, then you have users, not customers. The fact that you’ve acquired 50,000 users may help your product development and may create an asset interesting to someone else. It’s that someone else, if they’re prepared to pay for access to those users, who then becomes your customer.

So how do you figure out how much it costs to get new customers? You need to run lots of experiments here to find the specific answer to your business model, these are a few areas to keep in mind as you go “hustle”:

  • Brand awareness. This can include awards, publicity, keynote speaking, plus all your media elements.
  • Digital channels. This is Facebook Ads, Google Ads Words etc
  • SEO. You know what this is
  • Marketing team members who run your digital campaigns, this includes SEO and AdWords. This is usually the biggest cost if you’re focussed on digital marketing
  • Tele sales people. These are people who call potential customers and sign them up
  • Face to face sales people
  • Offline print marketing (this still counts in some industries, such as health)
  • Channel distribution agreements with a large corporate where your product is made available to a well dispersed audience.
  • Business development managers

The right mix will be driven by profiling who your customer is. Consumer customers (remember, these are people who pay you) are best reached by social media and digital channels. Large corporates have long sales cycles best led by business development managers.

To start with, the person doing the work on any or all of these will be you – as you grow you’ll need to hire people to take on these roles.

Your investors want to know you know how to get customers, and how to scale this up once they tip their money in.

It is always more expensive than you first think?

So how much does it cost to acquire customers in your business?


Warm leads vs cold leads

Cost of digital marketing campaigns

Volume of signups / marketing person

Volume of signups / sales person