What is Your Customer Acquisition Cost?

Acquiring new customers can be expensive. Marketing, promotion and all the activities you engage in to prospect and find buyers for your work can add up. How can you reduce this cost?


As you gain customers, each one costs your small business money. How much do you spend on a marketing program? Divide the number of new customers gained by the cost of that marketing to find the cost per customer. The figure may seem high at first, but it can be lowered.

Use your marketing dollar wisely by:

  • Understanding your customer. When you know who you are appealing to, you can choose opportunities and venues appropriately and more efficiently, rather than using a “scattershot” approach.
  • Staying connected. It takes 7-10 contacts for people to remember you. Prospects need to hear from you on a consistent basis to be cultivated into customers.
  • Following up. When you get a hot prospect, be sure to reach out to them in every step along your sales cycle, and remember to ask for the sale.

What else lowers your acquisition cost? Selling a one-of-a-kind piece of art to one retail customer and then moving on to finding the next is the least efficient way to make money as an artist. Making a “cold” sale every time is expensive, whereas existing customers are much easier to close. It is 6-7 times more costly to acquire a new customer than it is to retain one.

Encourage repeat sales to lower your cost per customer.

  • If you are selling to wholesale buyers, build a business relationship and do everything you can to partner with them to encourage sales and reorders.
  • If you are selling to retail customers, encourage repeat sales by creating a line that is collectible, putting them on a regular email marketing program and adding value to each sale.
  • Gain “warm” prospects by asking for referrals.

The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics

Do you have a strategy to lower your costs and build sales with each new customer?


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