Lower Your Cost of Acquiring Customers

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Lower Your Cost of Acquiring Customers

Encourager-In-Chief: May 9th, 2018

How to do it.

One of your tasks when starting a business is learning your true cost of customer acquisition. If you’re standing on a street corner selling newspapers, the cost is the newspapers, your time, a license (if required), and possibly rent (if you have any). It doesn’t make sense to invest heavily in acquiring customers because your sale per customer acquisition is extremely low. As in real estate, the key to your success will be location, location, location—and perhaps a catchy headline. Let’s look at some lessons that will help you more effectively establish your cost of customer acquisition.

I recently did a free 15-minute speaking engagement for one of my clients. The people in attendance were all new to me, other than the client who invited me. There were 17 people in the room. I gave away two of my books to each attendee. Within a week’s time of that speaking engagement, I had picked up nearly $2,000 by acquiring two new customers who attended that presentation.

The books were paid for, but let’s assume we use a $6 dollar per book cost to measure my investment. We’ll also throw in an hour of my time. That means my cost was $204 for books and $170 for my time for a total of $374. That means my cost per customer acquisition is $374 divided by two new customers is $187 per customer. That means my return is over 534% per customer.

In another example, I offer a 6-CD audio program as an early signing bonus to customers who register for my Sales Academy or Leadership Academy. Each program is nearly $1,000. The cost for me, to provide the CDs is approximately $27 or 14% per program. That’s more than a 3,703% per customer acquisition.

The key to high customer acquisition returns is your ability to offer something at a relatively low cost to you, which has a very high perceived value to your customer. If you put something in your customers’ hands up front, they are more likely to buy from you and refer others to buy from you.

A free book is the best business card in the world.
- Dave Romeo

This excerpt is taken from my Write and Grow Rich seminar.

Write And Grow Rich!

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I encourage you to order my Write and Grow Rich! book, which includes this lesson in much greater detail.

Write and Grow Rich!

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