Common definitions.
As you requested, Sales Funnels🤓
Customer Acquisition strategy – the process of attracting new customers to your business.
The goal of the process is to create a systematic, sustainable strategy that includes new trends and changes.
It allows: 💰 to earn money, to cover expenses, to pay employees, to reinvest in growth;
Show proof of work to investors, partners, and so on.
The ability to systematically attract and convert new customers makes companies healthy and developing, and investors happy.
The difference between lead generation and customer acquisition.
A graphical display of the customer’s movement along the stages of the purchase decision process is the sales funnel – customer funnel.
The buyer moves from top to bottom through the stages:
⬇️ Awareness of your brand (lead generation happens here).
⬇️ Add your product/service to the list for review.
⬇️ Purchase decision = get a paid customer.
At the same time, customer acquisition refers to the funnel as a whole.
And now a metric – Customer Acquisition Cost (CAC)
Customer Acquisition Costs (CAC) are the costs associated with attracting a new customer to your business, such as marketing costs, events, and advertising. It is calculated based on a specific campaign or time interval.
CAC shows the real value of your marketing efforts and allows you to measure your ROI – an indicator that is set by both CEOs and managers and investors.
When I promoted Ermenegildo Zegna, Lora Piano, Gucci and so on for the luxury chain of boutiques Babochka) – my CAC is 300 RUB = 4.25 EURO,
and the order of ~ 37 000 RUB = 524 EURO is a very cool result if you know who can make it better – introduce me, please!
Formula CAC = MC / CA
CAC – the cost of attracting customers;
MC – marketing expenses;
CA – Acquired Customers / Sales.
You need to include all expenses in MC: from campaign expenses to marketing salaries and the cost of software.
If Company A spent $ 10,000 to attract customers in the 4th quarter of 2017 and acquired 100 customers, CAC = $ 100.