Determining The Right Customer Cost per Acquisition For Your Business

Trying to figure out your paid search budget? Clearly defining your acceptable cost per acquisition for new customers is the best place to start.

All things being equal, the more your company is willing to invest to acquire new customers, the faster the customer base will grow.  However, there is also a direct relationship with your desired number of new customers and the amount you need to invest to obtain them. Deciding how much to invest in acquiring each new customer depends on the value of your customers over time, as well as your overall business goals. 

Let’s Start with Annual Value

There is a lot of talk about the “Lifetime Value of a Customer”.  Understanding the lifetime value is important, but most businesses don’t have the luxury of waiting a lifetime to get a return on investment. Thinking more in the short term, let’s understand the annual value of a customer.  Take a home cleaning business as an example. The annual value of a new home cleaning customer can be figured out like so:

Average Transaction Amount: $100
Average Transactions per Year: 26
Gross Revenue per Year: $2,600
Average Profit Margin: 50%
Annual Gross Profit Margin: $1,300

In addition to the value of one customer, you should also consider how much of your new business comes from customer referrals.  If 50% of all new business is the result of customer referrals, for example, you can assume that every new customer generates another customer. 

Once you’ve done the preliminary math, then you can wisely determine how much of that annual gross profit margin you are willing to invest. Continue Reading…

Landing Pages, Part Two: How to Craft Your Landing Page Message

If you read our post on landing pages a couple weeks ago, you know how important it is to anchor your search marketing campaign with a landing page. But what makes for a good landing page? That’s a whole ‘nother ball of wax.

Eight out of ten times you conduct a search for a product or service, you will click on a paid search ad that leads you to a landing page that doesn’t speak to the two questions all searchers are looking to get answered: “How can you solve my problem?” and “Where do we go from here?”.

Simply put, most landing pages do not have a clear and concise call-to-action that spells out exactly what action they want the user to perform.

The key to a good landing page is to always focus your messaging in a way that guides users as to what you want them to do.

Here are a few best practices to go by when trying to develop your landing page message. Continue Reading…

A Few Good Reasons Why Your Paid Search Campaign Needs a Landing Page Now (Think ROI)

You spent a good deal of time and attention to build an amazing website. You followed all the best practices out there. You’ve tested the contact forms, content subject, keyword selection, page titles, color combinations, and navigation usability to come up with the best customer experience.

So why is your search marketing team telling you that you need a “landing page” to send your paid search prospects to? Can’t you just send these clicks to that perfect website that you put so much time and sweat into?

First of all, it helps to understand what a landing page is. We define a landing page as a single web page that a user “lands on” after clicking a link or an advertisement. The landing page is intended to maximize user conversion, however that conversion is defined: sale, lead or branding. The most common conversion goal is data capture, getting the page visitor to complete an online form to generate a marketing lead.

So you know what a landing page is, but the question still exists - why do you need to create a separate landing page, or pages, for your search engine marketing? Continue Reading…