Customer Acquisition Cost
April 3, 2025
Customer acquisition cost is the cost which suppliers invest to acquire a new customer. This cost should be always less than the overall value of customer in the entire customer life-cycle. For example, if the cost incurred to acquire a customer is $10, but the contribution of the customer to the profit is only $9…
Business always starts and closes with customers and hence the customers must be treated as the King of the market. All the business enhancements, profit, status, image etc of the organization depends on customers. Hence it is important for all the organizations to meet all the customers’ expectations and identify that they are satisfied customer.…
Customer acquisition is the process of acquiring new customers for business or converting existing prospect into new customers. The importance of customer acquisition varies according to the specific business situation of an organization. This process is specifically concerned with issues like acquiring customers at less cost, acquiring as many customers as possible, acquiring customers who…
Orientation of customer means how the customer’s preferences are possessed or in what areas of business the customers are conscious. A customer can be cost oriented, value oriented or technology oriented as discussed below:
For example, some customers try to repair costly machines by local vendors. These vendors do the work with marginal profit, so accountably are very cheap, but whatever they do is not quality work as they are not the actual manufacturer of that particular product and may lack in many aspects while repairing the machine. In case the machine fails the second time, these customers put the blame to the original supplier and he then has to pay for that. In some cases these customers are also ready to buy second hand products and then challenging it to perform as a new one.
Hence the suppliers should always focus on strategies which are not only performance or quality driven but also self driven, otherwise they always find themselves arrested in payment related problems and they again have to put a lot of effort and cost on running for payment from these customers.
According to these customers this type of deal is like a long term investment with higher future profit. In some cases these types of customers are also ready to pay premium because they know that this would make a better economic sense during a long run and there will always be lesser maintenance efforts required. These customers are tended towards maintaining a healthy relationship with suppliers as they are the satisfied customers.
These customers are innovative and have zeal towards technical aspects. They also have a tendency for experimenting new things and do interact with people of same nature or tendency, so the suppliers are helped by them in creating new referrals and increase the business. These customers are also satisfied customers and ends by making worthy relationships with suppliers.
It is necessary for a supplier to study the orientation of customers before dealing with them as it will help them to identify the specific customer needs and transact accordingly. By identifying the orientation of customers the suppliers could easily make their strategies to grab customers by fulfilling their aspirations and turn them to satisfy customers.
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