What if there was a magic button out there that cost your child care business $1 to press and in return, your business received $5? As far-fetched as it sounds, by understanding your true cost of child care customer acquisition, you are halfway to creating a “magic button” that makes money for your business, every time.
Figuring out your cost of customer acquisition isn’t rocket science but it does take measurement and data. Remember: “You can’t manage what you can’t measure”. That means you need to track all leads, including source, cost, and result. A CRM tool (such as Childcare CRM) can come in handy for this. Ummm, What is CRM?
Once you’re accurately tracking data as well as marketing spend, it’s fairly simple to determine your average cost of customer acquisition. For example, lets say that your center enrolled 25 new families in 2012 and your total marketing spend was $50,000. This means that your average cost of customer acquisition would be $50,000/25 new enrollments = $2,000/new enrollment.
Lowering your cost of customer acquisition is a straightforward way to increase profitability of your center. However, you can’t lower your cost of customer acquisition if you don’t know how each marketing channel is performing. Traditional media ads are some of the most difficult to track since there are no guaranteed results and no way of knowing the value that was derived from them. Online ads are typically much better for tracking results and figuring out cost of customer acquisition. We’ll examine various methods of online advertising in a later post. This tracking ability along with shifting parent behaviors are two of the big drivers in the increased push towards online and mobile advertising and marketing.
By calculating your cost of customer acquisition, you’ll not only have a better understanding of how your overall marketing efforts are performing, but you’ll also be in a much better position to increase the profitability of your center. For help lowering your cost of customer acquisition and filling vacant seats at your center, please email Neil or call (888) 289-5236 x706.
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