Customer Acquisition, A Primer
If I realized one thing in business school, it is that just about everything is about customer acquisition. The Internet, simply put, is the most efficient medium ever created for connecting buyers and sellers. My own personal experience with customer acquisition started a long time ago, when I did my first startup. I’m not talking about the one I did after Microsoft. I’m talking about the ShareWare business I did before I went to Microsoft. The challenge then, as now, was how to alert customers to the availability of a product (back then it was an alarm clock) and then get them to pay for it. I didn’t know then that that was called lead generation and customer acquisition.
Customer acquisition encompasses a lot of different areas. The Yellow Pages are perhaps the most obvious form of “old school” lead generation. The plumber puts an ad in hoping that when you need a plumber, you will see his ad, and call him, resulting in a sale. Direct mail is another form of off-line lead generation. All those fliers you get in the mail are trying to get you to make a phone call, fill out a survey, or go to a web site, so that you can become a lead, and eventually, a sale. Finally, advertisements on the radio and television help to build brand awareness, but also serve as lead generation. “Call now for this special offer…”
In some sense, programs like adwords and adsense are the most basic form of lead generation. (Adwords allows you to buy ads that appear alongside the search results in Google, or on web sites that display these advertisements, through a system called Adsense. In the case of adwords and adsense, ads are keyword based, so that contextually related ads automatically appear for the right search results and the right content on web sites.) Ads range from the inexpensive (a couple cents each) to the wildly expensive ($10 or $20 or more per click). Unlike banner ads which advertisers pay for based on how many times the ads are displayed (called impressions), pay per click (PPC) ads (e.g. those that appear on google and yahoo, for example) charge the advertiser when the ads are clicked on.
So in the evolution of lead generation, you might think of the yellow pages and newspaper classified ads as the most simplistic forms of lead generation because the advertisers (sellers) have to pay a fixed amount regardless of how many times their ad gets seen or acted upon. Online ads where the advertiser pays based on number of times an ad is shown were an improvement. The next real break-through was in only having to pay when potential buyers clicked on ads, e.g., Pay Per Click.
What's the next step in the evolution? More efficient lead generation. Better customer profiling. Clearer understanding of conversion rates (that is, when leads turn into sales). Tune in for my next installment.
Customer acquisition encompasses a lot of different areas. The Yellow Pages are perhaps the most obvious form of “old school” lead generation. The plumber puts an ad in hoping that when you need a plumber, you will see his ad, and call him, resulting in a sale. Direct mail is another form of off-line lead generation. All those fliers you get in the mail are trying to get you to make a phone call, fill out a survey, or go to a web site, so that you can become a lead, and eventually, a sale. Finally, advertisements on the radio and television help to build brand awareness, but also serve as lead generation. “Call now for this special offer…”
In some sense, programs like adwords and adsense are the most basic form of lead generation. (Adwords allows you to buy ads that appear alongside the search results in Google, or on web sites that display these advertisements, through a system called Adsense. In the case of adwords and adsense, ads are keyword based, so that contextually related ads automatically appear for the right search results and the right content on web sites.) Ads range from the inexpensive (a couple cents each) to the wildly expensive ($10 or $20 or more per click). Unlike banner ads which advertisers pay for based on how many times the ads are displayed (called impressions), pay per click (PPC) ads (e.g. those that appear on google and yahoo, for example) charge the advertiser when the ads are clicked on.
So in the evolution of lead generation, you might think of the yellow pages and newspaper classified ads as the most simplistic forms of lead generation because the advertisers (sellers) have to pay a fixed amount regardless of how many times their ad gets seen or acted upon. Online ads where the advertiser pays based on number of times an ad is shown were an improvement. The next real break-through was in only having to pay when potential buyers clicked on ads, e.g., Pay Per Click.
What's the next step in the evolution? More efficient lead generation. Better customer profiling. Clearer understanding of conversion rates (that is, when leads turn into sales). Tune in for my next installment.
1 Comments:
great idea!
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