SME e-commerce websites need to drive visitors and leads to keep their businesses viable. And to do that, they need to attract either new or return customers to regularly visit and buy. So, keeping the cost of acquiring new customers is extremely important if they are going to scale their business cost-effectively.
Cost of Customer Acquisition
The Cost of Customer Acquisition (CoCA) is an incredibly important metric in a e-commerce business. Ideally, it is one that is low and remains low. However, this - in conjunction with your Customer Lifetime Value (CLV) are crucially important to you overall business success.
Define Cost of Customer Acquisition
The CoCA is the average amount of sales and marketing expenses you invest to acquire a single customer. Like any good metric, it's comprised of smaller elements that you can work on optimising. These will improve your business.
Cost of Visitor Acquisition, Cost of Lead Acquisition, Cost of Customer Acquisition
The metrics are the Cost of Visitor Acquisition (CoVA) and the percentage of those that turn into leads. This gives you the Cost of Lead Acquisition (CoLA) and the percentage of those who become paying customers gives you the final Cost of Customer Acquisition (CoCA).
Why are these so important to an SME and how do you adjust them?
There are specific tactics to making sure you are getting the most cost-efficient overall acquisition cost as possible. We've outlined some of the best of these here:
- Reducing Cost of Visitor Acquisition: If you are currently paying for Pay Per Click advertising (PPC) to drive traffic to your site then you could lower that cost by blogging instead. Blogging will improve your native SEO and will also generate traffic long after your PPC budget is all gone. If you have blog posts up then they will generate traffic for you as long as they remain posted (and it won't cost you anything further). As your SEO improves then your dependency on PPC reduces and you should then only really add it to your mix when you need to fill in specific holes in your numbers on a tactical basis
- Improve volume of Leads to Customers: Additionally, it is possible to integrate inbound marketing and e-commerce. That will allow additional functionality and will reduce the Cost of Lead Acquisition (CoLA) because you will be able to use workflow to undertake automatic processes - an important one of these is the Abandoned Cart which would convert leads into customers more efficiently
- Convert more Visitors into Leads: By providing something more compelling, you are able to convert more visitors into leads. In effect, you give something back which is useful to the visitors - something good enough to mean that they are happy to complete a form. Getting customers to complete a form is a science in itself but, in general terms, keep the amount of information requested to a minimum, offer something useful back (an eBook or something else quite substantial) and, if your technology tool allows it, use progressive profiling (where additional information is requested on further visits)
These are incredibly important to SMEs because money is always a scarce resource and that means cost-effective strategies are very important. Technology is very important and, with the right tools and a focused approach, ecommerce owners can systematically move the factors which affect conversion to optimise customer conversions.
If you do thwith well, what impact can these have?
E-commerce business owners need to have a number of visitors that regularly convert into leads and then into customers. You can identify where you can make the most difference.
If you liked this blog then you might also like this previous blog too. If you want to make sure you are getting the most, then experts in inbound marketing for e-commerce would be able to help.