How do you lower your customer acquisition cost to zero? - Funnel Science

How do you lower your customer acquisition cost to zero?

Or as close to zero as possible?

Two of the most intelligent questions ever posed to me as the CEO of a growing company:

“How do you lower your customer acquisition cost to zero? Or as close to zero as possible?”


These questions did not come at the same time or from the same person. As I was working on question 1, question 2 was brought up in a leadership meeting.

At first I had no idea. It took me a very long time trying to test ideas solve the first question. It required looking at our sales funnel in a completely new way with new technology. One of the absurdities that I continue to hear on my journey is that content marketing, SEO and social marketing have no cost. I mostly hear this from companies who are not growing and not accounting for the cost of time or labor. And the marketing people who say that are the same people who do not know or track their customer acquisition cost.

When I found a viable, executable solution to question number 1, I realized how close we were to answering number 2. To answer question 1 required a 1 time capital expense to expand our sales funnel technology to get leads and sales without an ongoing advertising expense. This was a major break through as we were able to drop our lead costs from $100 a lead down to zero. But I also found there is not a true zero in business costs.

So our cost per lead was zero but we still had a significant acquisition cost to fund sales activities.

The solution to lowering your cost is within the technology stack of your sales funnel. It also requires a method to reach far and wide as quickly as possible. Over and over that creates daily sales activity. But there was still the costs associated with our sales team which followed up with the leads so I had not solved the question. I was able to lower the marketing costs to zero but not the sales expense.

To try and solve the problem I knew I needed to gather as much data was a major part of this task and required a lot of testing and refinement. I also had to answer how do you build an audience of your target market and remove all fraud, junk spam and waste? This was very difficult to figure out and is a plague to a business and a major drawn on the P&L.

Or as close to zero as possible?

I have yet to solve reducing our sales expense to zero. I was able to significant cut costs by doing a few things:

  1. The first was removing the junk/spam/click fraud leads from our leads database by applying predictive modeling.
  2. We analyzed our customer list and built look a like audiences. We got rid of the junk and only targeted leads that had at least 40% probability to sign-up.
  3. Next we reduced the number of steps in the sales process eliminating time consuming activities like contract generation. One major step forward to reduce sales cycle time and labor was linking our contract generator with e-sign. We setup our CRM to HelloSign API to speed up the signing process for new clients.
  4. We hired better sales people that had significant higher close ratio.

As I continue to test out various ideas to lower our acquisition costs, I will update the post with our results and learnings.






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