Calculating the Cost of Acquiring a Customer

It would be nice to be able to say that establishing your business is most of the uphill climb, and that it's all down hill from here. The fact is, however, that your work has only begun. Your actions, and budget for that matter, will center around getting your products and/or services into the hands of those who need it most. Calculating the cost of acquiring a customer is rooted in how well you advertise.

Wouldn't it be great if the modern business market were a bit like the popular movie The Field of Dreams: "If you build it, they will come." In the real world, though, "they" will not come if they don't even know your business exists. Hence, the trick is to put yourself out there for public pawing, if you will. And, the more people who know about your award-winning products or services, the better.

Still, there is the matter of financing it all, which can rival the challenge of starting up your business. Ultimately, advertisement can make or break your business, and, if you don't manage the advertising costs well, it could put you further in the whole. Fortunately, if you have established your own business, you obviously have what it takes to handle your advertisement and make it successful, with a little bit of advice, that is.

Should you choose to advertise in national or local newspapers, the cost of acquiring a customer could range anywhere from $1000-$200,000. These are estimates, of course, and prices vary according to your choice of ad. Half-page ads are clearly less expensive than full-page ones. Similarly, black and white ads are more cost effective than vibrant, colorful ones. From a creativity standpoint, the sky's the limit, but unfortunately so is the budget. By far, newspaper advertisements are the costliest and often have a much smaller rate of return.

On the other hand, online advertisement is both cost effective and will have the wider impact, reaching more people than is ever possible through more traditional methods. Designing an advertisement website for your business is one of the most popular. Creating and maintaining your company's website can cost as little as $4.95 per month, which one of the lowest prices to secure the services of an excellent Web host.

When choosing a company to host your website, you usually get what you pay for. Most put their most inexpensive plans out there to draw clients in, but most of the time you can pay just a little more to get way more features than you could possibly know what to do with. In all, choosing a Web host will give you more for your money, especially because many offer services that help to market your site.

Another options would be to use online promotions, like coupon promotions or features like Google's AdWords. Obviously Prices vary widely. For instance, AdWords is free--sort of--you actually pay for each click that leads to your site, which, once you've fronted the $5 start up fee, can range from a penny to $20 per click. So basically you pay only when someone views your site. It doesn't get more cost effective than this.

Who knew that calculating the cost of acquiring a customer would be so complex, but with the right tools and a bit of business savvy, you can make your ad budget spread further than might have though possible. So with local online promotions, the sky can be the limit for your creativity, but your ad costs don't have to reach to the sky as well.