The Declining Cost of Customer Acquisition

By Paul Kedrosky · April 17, 2005 · ·

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.

Related posts:

  1. Ad-Skipping’s Cost: $27-Billion in Ad Revenue
  2. Radio, Radio — Declining Listenership
  3. The Cost of Starting Up
  4. Me, NPR, and the Cost of False Positives
  5. Are Rumors of Email’s Death Exaggerated?

Comments

  1. Zack Handley says:
    April 18, 2005 at 9:44 pm

    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! :-)