The Declining Cost of Customer Acquisition

The following is arguably the most important marketing factoid (okay, faint praise) I will see this year. Based, in part, on a recent Piper Jaffray report, I break down the cost of customer acquisition, by method, as follows:

  • Search: $8.50
  • Yellow pages: $20
  • Online display ads: $50
  • E-mail: $60
  • Direct mail: $70
  • Indirect sales: $1,000 (my estimate)
  • Direct sales: $22,000 (my estimate)

Need I say it? The differences are staggering. Assuming your business is one where you can use Adwords or the like — and there are still markets, like selling large piece of capital equipment, where that is not the case — then your shareholders should sue you for financial mismanagement if you’re not doing it.

Comments

  1. You wouldn’t believe the amount of companies without a Search Engine Marketing strategy! Big Companies, Huge Companies, that sell very expensive products that are constantly searched for….
    It make my job easy!
    :-)