Digital Marketing’s Cost Per Acquisition in South Africa

by | Oct 29, 2021 | Marketing

Running a business and ensuring that it is constantly growing can be stressful. It is clear that effective marketing is the key to a business’s constant growth; however, it is hard to determine the budget that should be spent on marketing campaigns and customer acquisition.

In this article we will explore what digital marketing’s Cost Per Acquisition in South Africa should be, and why it is such an important metric.

What is Cost Per Acquisition in Digital Marketing?

Cost Per Acquisition, also referred to as CPA, is in essence, the amount of money required to gain a customer. It is mostly used when customer acquisition campaigns are being used to gain exposure and convert potential customers. It is an extremely important part of marketing as it determines what the revenue impact will be per marketing campaign. In other words, it allows business owners to determine whether they can afford a certain marketing campaign, and what the long-term financial gain will be.

What is a Good Cost Per Acquisition?

There is no hard and fast benchmark for a good Cost Per Acquisition. Depending on the industry and aspects such as margins, prices, and operating expenses that are tied to that industry, CPA can differ. It is up to the business owner to determine and calculate what the worth of a client would be in the long term, and what a fair CPA would be in relation customer acquisition.

Some factors to take into consideration when calculating a reasonable CPA include:

  • The business’s stage of growth – Depending on whether a business is in a phase of growth, stagnation, or decline, an owner will decide what budget can be made available.
  • The budget that is available – If the budget that is available is limited, aim for low hanging fruit that is easy to achieve conversions with. Once more budget is available, one can expand to more difficult (and expensive) targets.
  • The marketing and advertising medium being used – The type of marketing medium that is used will greatly determine the CPA. Some of the differing marketing mediums include content, Google Ads, social media marketing, affiliate, or display marketing.

How a CRM Can Improve Customer Acquisitions

There are multiple ways in which a CRM (Customers Relationship Management) system can improve a customer acquisition strategy and perhaps even the CPA. Some of the valuable features that can help consist of:

  • Improved Targeting – By analysing the data collected and captured by a company’s sales team, one can determine where a business’s target market truly lies and improve the targeting of campaigns.
  • Personalisation – A CRM allows for the implementation of personalised sales messages and follow up communication. This will increase the chances of customer conversion.
  • Increased Lead Response Time – One of the functionalities of a CRM is to send reminders to sales personal, informing them to follow up on leads that have come in. A fast response time makes a good impression, and increases the chances of succeeding on a sale.
  • Improved Customer Retention – CRM’s improve customer retention when used and implemented correctly. The longer a client is committed to a business the more value they bring to a company, which improves the CPA in the long-term.

To find out more about how a CRM can empower your employees and help your business succeed, contact us at Leadtrekker!

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