When we acquire a new customer we anticipate that they are going to represent value for money and increased profits in the long term. But what is the true cost of each new customer?
When we work with business owners at the Business Growth Academy we don’t just look at how you can get new business, we look at the numbers involved in acquiring it. The key is to identify the Return On Investment (ROI) on all activities.
There are many ways to acquire a new customer:
- Buy in – pay for each lead you receive
- Up sell – sell more to an existing or previous customer
- Cross sell – either something new to an existing customer or to a new customer via an existing contact
Each method brings in new business and we show you how to evaluate the benefits of each and measure the ROI on the time/money and other resource it takes to achieve each.
We also look at the lifetime value of prospective customers, and we help you to strategize for customer retention and growth. Together we find the most cost effective means of gaining, retaining and growing new business.
Think about how you acquire new business. What do you include when you calculate how much it costs you? Your advertising costs? The time you spend networking? The time you spend on social media? The time the actual sales process takes? Are there costs involved in the sign-up? (this will vary significantly depending on the type of business you have but could involve credit checks, business research, new software, new hardware, the list goes on).
Could investment in your staff mean they can take on more responsibility for gaining new business? Can the customer service role be enhanced to include customer acquisition?
There is a lot to think about, but don’t be daunted, come along to one of our introductory events http://business-growth-academy.co.uk/register-for-business-boardroom/ and find out how you can increase your profits and start making your business work harder for you.