As a business owner, your bottom line is likely at the top of your priority list! Staying in the black is your key to longevity in the marketplace. Here are a few tidbits to help you understand the value of digital marketing as it pertains to your cost to acquire a new customer.
YOUR CUSTOMERS RARELY KNOW WHERE THEY FOUND YOU
There are a million ways to advertise your business—television, radio, billboard, yellow pages, newspaper, direct mail, and the list goes on, and on, and on! How can you possibly know which one is most cost effective? *Hint: asking your customers where they found you is one of the worst ways to learn. Frankly, if you are running a good mix of media, people can’t remember the first place they saw you and they feel pressured to answer the question so they just guess! They may say, “I found you on Google.” When in reality, they heard your name on TV, saw a billboard, and then searched for you on Google.
COST PER ACQUISITION (CPA) IS A DIRECT FUNCTION OF COST PER THOUSAND (CPM)
Cost per thousand (CPM) is a fancy advertising acronym that is exactly what it sounds like—the cost to reach 1,000 people. I always encourage business owners to compare the CPM of different mediums as a baseline for understanding which medium will be the most cost efficient.Your CPM directly correlates to your CPA—are you following me here? If you lower your cost to reach 1,000 prospects you will automatically lower your cost to acquire a new customer. So how do you do that? Simple. You ask your rep or your agency to provide the information. If you need to calculate it yourself, here’s a quick link that explains how to calculate this number for various mediums: http://www.srds.com/frontMatter/sup_serv/calculator/cpm/.
DIGITAL IS MORE COST EFFECTIVE AND HIGHLY TARGETED
You will find that 99.9% of the time, online marketing solutions, around an $8-$12, CPM (retargeting, IP targeting, digital display, geo-targeting, etc.) are far more cost efficient than traditional media. In addition, the online demographic targeting capabilities are far greater than mass media so you are getting a higher qualified audience at a much lower cost.
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