How Lead Generation Improves Customer Acquisition Costs

Digital Marketing

Lead generation can be quite lucrative, and an effective lead generation strategy can bring in new customers without costing you much more than the time it takes to set up the strategy in the first place. Some companies have done lead generation using cold calls and emails, but there are some significant downsides to these methods that limit the effectiveness of this approach. Luckily, we’ve put together some advice on how lead generation can improve customer acquisition costs and what you need to know to get started with your own lead generation campaign. Let’s take a look at some of the ways that lead generation can reduce customer acquisition costs in your business.

The Cost of Finding Customers

By definition, lead generation is a targeted process that pulls in prospective customers based on defined criteria. One of its main advantages is that it allows you to refine and target your marketing efforts toward people who are more likely to buy your product or service. 

When done correctly, lead generation can slash customer acquisition costs because of lower overall marketing costs.  However, if you consider how much time goes into allocating budgets and delivering content across multiple channels, it’s easy to see why cost-per-acquisition (CPA) remains high for most businesses.

In an industry like retail, which is littered with expensive advertising channels such as TV and magazine ads, it can be a challenge to acquire customers cost-effectively.

On average, only about 20% of all advertising budgets go toward direct response ads that elicit a purchase from a prospect. The rest is wasted on efforts to drive brand awareness or deliver non-paying customers who simply visit your website. 

Lead generation helps you take control of your customer acquisition costs by providing you with leads to convert instead of leaving it up to chance. Even when you factor in additional web development and design services needed to build and maintain your landing page, lead generation can still be significantly cheaper than generic ad campaigns.

The Cost of Getting Prospects To Know, Like, and Trust You

You might not know it, but you are paying someone else to get in touch with your prospects. Not in a monetary sense, of course; you do it every time you run an ad on Facebook or Google. These ad networks charge money to place ads—that’s how they pay for themselves and make money. 

But these same networks can be used by website agencies and consultants to drive traffic back to their clients' websites. The difference is that when your own website generates leads, then it's possible to close deals at low cost and earn high margins.

Have you ever wondered why your clients keep coming back for more? This is because trust and relationship building is critical to sales. 

By having them engage with your brand (whether it’s by answering a questionnaire or simply providing their name) they’re much more likely to convert into leads and customers. The value of relationships becomes apparent when you consider that, on average, sales reps make between £75k-£150k per year depending on their experience. 

Finding customers is expensive, and building relationships can be even more so. But fortunately, digital marketing and website design has given even the smallest business a better chance than ever at winning new customers.

Working with a Web Design Agency

When working with a web design agency, there are three primary things you should be on the lookout for. The first is domain expertise and creativity. You want to make sure they have experience in your industry and not just an overall understanding of marketing—what your company needs to stand out is within their scope of expertise. Secondly, you want to make sure that they’re dedicated to achieving business goals.

Thirdly, you want to be sure that they’re a strategic partner for your company. To achieve your goals, it’s important to be able to work together on how best to use digital marketing and website design to expand your customer base. 

With an agency like ours, you can get everything from website design and management, search engine optimisation (SEO), pay-per-click (PPC) campaigns and email marketing – in other words, everything you need for lead generation that helps improve your customer acquisition costs.

Analytics Are Important For Successful Lead Gen

Google Analytics is by far one of our favourite marketing tools, both as a website agency and as digital marketers. 

It's free to use, gives detailed analytics on site traffic, bounce rates and overall search engine optimisation and also provides information on lead generation campaigns. When you know where your leads are coming from and how to increase that number, you can maximise customer acquisition costs (CAC) for any business. And that's vital for successful ROI. 

If a company isn't generating enough leads or their CAC is too high, they have a limited time frame in which to make money—and eventually struggle to grown their business.

The importance of analytics is clear, but sometimes there's so much to analyse that it can be difficult to know where to start. That's where professional digital marketing can help.

So get started by setting up google analytics (or have us do it for you), and start optimising your lead generation campaign to optimise your customer acquisition costs.

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