The Central Measurement: Customer Acquisition Cost

It isn’t magic!

Street Magician

The cost to acquire a new customer with a known lifetime value is the single most important gauge a business can use to reduce variability in results and drive predictable growth.

Every business should know – in time and money –  how much a new customer in each segment costs and will produce in revenue, and for how long.  Integrating sales people and programs effectively to track and measure behavioral dat create a model and feedback real time results to improve the model completes the process.

This should give companies the ability to identify a target acquisition cost per customer by segment, budget for results, and measure performance against it.

Most companies can’t.

But we can.

We begin with customer data and a detailed examination of spending over time, purchase intervals, average order sizes and gross margin. We add industry specific data, both quantitative from company records and external sources, and qualitative from customers, sales and service people, among others. We begin to build a picture of the target customer, incorporating responsiveness data from company programs to refine the picture. We integrate these efforts with direct connections to sales people both to support their work and to gain feedback from them that can be applied to subsegments of customers.

All of this increases the velocity of new customer acquisition and resulting revenue while reducing budget variances and expense.