Over the last few weeks, we’ve been exploring all things customer acquisition. We recently published our Friendly Guide to Customer Acquisition along with an article about CAC, and found our readers and clients were often getting back to us wanting to know how their own Customer Acquisition Cost compared to other companies and industries.
Of course, it’s perfectly normal to want to compare. After all, the top priority for many sales teams and marketers is attracting new customers and retaining the ones they have. As time passes, some might lose interest with your startup or move to your competitor. Over time, you’ll likely allocate a significant amount of money on customer acquisition initiatives, but the amount of money you should be spending will vary significantly based on your industry, competition and target market.
So before you sign off on that marketing budget, here are a few benchmarks you can use based on the platform you’re using, and the industry you’re in.
1. Cost per acquisition on Google ads
To many, Google Ads is still the most effective ingredients in their digital marketing mix; allowing you to widen your reach and promote your product to millions of users.
In terms of averages, CPA is lowest in the auto industry, which acquires new customers at only $33.52 a head, while the tech industry spends a whopping average of $133.52.
2. Cost per acquisition on Bing
While Google may be the world’s eponymous search engine, Bing is still holding its own and can deliver serious value for some brands and organizations.
The search giant - owned by Microsoft - boasts 1.3 billion monthly users across the globe and owns 39% of mobile search click shares in the US. Because it has a smaller audience, bids on the search engine are cheaper and the competition for keywords is lower.
Bonus: marketers primarily using Google Adwords will be happy to know that they can also import ads directly from Google campaigns into Bing Ads.
In terms of cost per acquisition per industry, the home services industry takes it at $21.68, and technology once again dishes out the big bucks at $102.94 per new customer.
3. Cost per acquisition for Facebook marketing
In marketing circles, Facebook is considered the most important platform for both B2C and B2B businesses. In fact, the social platform already has 80 million business Pages online – and numbers don’t seem to be slowing down..
There are more stats, of course. 78% of Americans discover new products through Facebook and 30% of marketers believe it has the highest ROI of all digital ads.
As for average cost per acquisition numbers, education gets a big bang for its buck by paying only $7.85 per customer, in contrast, of course with tech’s $55.21.
4. Cost per lead for B2Bs
While they also keep a close eye on CAC, Startups in the B2B industry are heavily focused on lead generation – so the cost of getting a potential customer’s attention, as opposed to the total cost of converting them into a customer. Hubspot found that 65% of businesses consider lead generation as their biggest marketing challenge. But unfortunately, 96% of website visitors aren’t ready to purchase yet.
Cost per lead in the B2B industry can vary greatly. The nonprofit sector, for example, can draw in a lead for $31, while the technology industry spends nearly $208 per lead.
If you break down those numbers into channels, it’s worth noting that B2Bs are the biggest spenders when it comes to acquiring leads at events and trade shows – with the average spend of $811 per lead. In contrast, they also turn to search engines to acquire leads at only $31.
While lead generation can seem expensive, it’s truly your conversion rate that determines your ROI. For example, if you’re a startup in the B2B tech industry with a 40% conversion rate and you get an average of $15000 per converted lead, then paying $811 per lead seems fine. But if you’re not converting those leads, you may need to give some serious thought to your brand, your user experience and your conversion strategy before you continue investing. May we suggest these 100+ CRO ideas to get you started?
Article written by Monique Danao