Do you know how much it costs to acquire each new customer via your website?
Websites are often a significant cost to companies and yet their performance is rarely measured. Your website provides you with an opportunity to acquire new customers in a measurable and cost effective way.
To achieve this, you first need to know what it costs you to acquire each new customer via the website today. Once you know this you will then know whether these new customers are profitable. Obviously if it costs $100 to acquire a customer to your website who only spends $40 during their lifetime then you are losing money.
In order to ensure that the website is positively contributing to the company’s bottom line it is recommended that you examine the cost of customer acquisition as a key performance indicator of your website.
To calculate your cost you need to know:
New customers per month
These are the new customers who have either purchased directly from your website or who became a qualified sales lead via your website or who visited your website and then purchased products or services from your physical outlets.
Website Development Costs
This is the total cost to develop your website as well as major modifications since it was implemented.
Estimated life of the website
How long do you think that this website will be useful to your company before it requires a major overhaul. This figure should be in months.
Monthly Promotion Costs
How much does your company spend on promotions or advertisements that include the website address. Make sure that you include all your online and offline advertisements and promotions.
Monthly Maintenance Costs
How much does your company spend running and maintaining the website including:
* Staffing costs to maintain the website, handle enquiries, etc.
* Hosting costs, ISP fees, bandwidth, etc
* Other fixed costs
Panalysis has put together a nice calculator where you can just plugin your numbers and see the results without doing the math be sure to check it out.