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The key to B2B success is knowing the customer acquisition cost | B2B Marketing

Stephanie Reed, marketing executive at 

Purple Frog

, examines why the customer acquisition cost is your key to B2B success and how you can improve it

The majority of B2B are overspending when it comes to acquiring new customers. 

The reason for this is that they don’t actually know how much they should be investing or how, so they end up spending money in the wrong area and not see any return.

The number one step for creating an effective customer acquisition strategy is to calculate how much money you should be investing on the various different marketing activities to acquire new customers. This is what we call a customer acquisition cost, or CAC.

The CAC is very important both internally and externally to the company. Externally, it’s a key metric that investors are interested in, as it allows them to determine a company or new product’s profitability by looking at the difference between how much money each customer will bring into the business and the costs of obtaining it. 

Internally to your company, the CAC is an important metric for measuring the success of your marketing spend and for growing your company. If the cost of acquiring a new customer can be reduced, then it will consequently improve your margins and profit.

Here are a few tips on how to improve your customer acquisition cost.

Invest more online

Digital marketing produces almost immediate results at a fraction of the cost of traditional marketing. It will cost you a lot more to publish an advert in a printed magazine than get an online ad, and it will cost you even less to promote your business through your own website. According to CMO Council, 28% of marketers have reduced their advertising budget to fund more digital marketing, which indicates that going digital is the future of marketing.

Improve your website conversion

It’s very important to optimise the tools that you already have. Set up goals on Google Analytics and perform A/B split testing with new checkout systems in order to reduce shopping cart abandonment rate and improve the landing page, site speed, mobile optimization, and other factors to enhance the overall site performance. In this way, by using the tools that are already at your disposal, you can convert a much bigger amount of customers for a smaller investment.

Go for inbound marketing

Traditional/outbound marketing was what we would define as marketer-centred, with cold calling, cold emails (also referred as SPAM) and interruptive ads, whereas inbound marketing is a lot more customer-centric, with SEO, blogging and content marketing. Its focus is to get customers come to you, not the other way round, so you don’t have to keep banging on closed doors, hoping customers will eventually notice you. You can attract them to your site, landing pages and brand in a much more organic way, by being part of the conversation and drawing people in. According to Hubspot, inbound marketing also costs 62% less per lead than traditional marketing and generates 3 times as many leads.

Be really focussed


As mentioned at the beginning, you shouldn’t be spending a single pound on anything that cannot guarantee you a return and that won’t really resonate with as many potential customers as possible. Here’s an example: a famous feminine hygene brand spent milions of pounds to get ads for their sanitary towels displayed in all the major tube stations in London. Yes, the tube is a highly frequented place, and lots of women will certainly see these ads, but there will also be just as many men and children there who will not be interested in buying the product. Therefore 2/3 of the people who will see the ad will not become customers. That is a lot of wastage. Just because an advertising activity is guaranteed to show your product or brand to a large amount of people, you always have to ask yourself: are they the right people? Will they actually become customers after seeing it? Can I prove or measure that?

The path to success is to keep trying new marketing methods and channels, measure them and analyse them to find the one that will enable you to get a better return on your investment and reduce your customer acquisition cost.

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