How to lower your client acquisition cost

April 30, 2004

The whole purpose of search engine marketing is to attract new prospects and buying customers. In certain cases however, your sales could become limited, for the simple reason that not everybody is seeking the products or services your company offers.

Across the World Wide Web, if there are only 6,000 searches a month for the keywords industrial pump rebuilding, it will be hard for you to make more people search for that keyword phrase when WordTracker tells us there has been only 6,000 searches for those three keywords in any given month or period.

Even if you were to buy the keywords or keyword phrase industrial pump rebuilding, you cannot expect them to appear more than about 6,000 times a month, which will limit your page impressions to that same number of 6,000. One efficient way to turn around this problem is to lower your client acquisition cost (CAC). If you can successfully achieve that goal, it will effectively boost your ROI for the search engine marketing campaigns you are currently managing.

The breakeven point
If your company sells a product for $ 25, there is normally a percentage or dollar amount of that total price which is profit. Using information from your search engine marketing ad campaign, if you actually spend $ 25 on advertising, you will actually need to acquire at least one new client at $ 25 just to break even. In such an example, $ 25 would be your maximum client acquisition cost for this particular ad campaign.

Since search engine marketers usually want to maximize their ROI on their campaigns, to increase your profit level and by the same way reduce your CAC, some will try to reduce the unit acquisition cost set in this example ($25) to a lower level.

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Article written by Serge Thibodeau,
President & CEO,
Rank for $ales
Copyright (c) Serge Thibodeau 2004

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