Hello, We run a web agency. We started off as product guys (python/django shop), and over the years built a variety of tools that allow us to begin offering/branding our services as "marketing experts" -- whether it be CPC/CPM in the popular networks out there. The ability to create unique marketing user flows with our specific method to building products / architectures gives us a leg up to not only offer branded custom tools for our clients, but also place them in marketing distribution channels for maximized exposure. Our solution turned out to be very focused to driving ROI, and it's all custom from scratch + very affordable due to our methods of building / sourcing the products. So given we're ready to scale production, we've been preparing for a series of campaigns to acquire new business. Without going into detail in regards to the medium and method for acquisition, we're trying to anticipate the industry's average costs to acquire new business in the web development, web marketing space (without pinpointing on any specific mediums, but rather take the average on a year end sum of all activities put into 1). I'm anticipating the sum to be dependent on the average value of the service, so let's say $10,000 - 15,000 for the initial development, and then costs for the average monthly retainer that could be attached for marketing. From your experience, what would you expect the average cost per acquisition to be for that sum? Can it be argued that it be a an average fixed cost, or is it more of a percentage from the service's costs? I'm trying to estimate and anticipate required budgets to scale our reach and drive positive ROI. Thanks!
I think that your question is a little too broad but let's see if we can narrow it down. Based on the unknown, CPA = Cost Per Lead divided by Conversion Rate. However, these metrics are mostly applicable in the SEM world when advertising using PPC models. In my opinion, your CPA is undefined as it stands. The more important question you need to ask yourselves is the monthly paid media budget you'll need to invest. There's a different formula for that. Typically when considering a PPC advertising model, budget plays a factorial role until you have available metrics that can help you determine your Average CPA. Hopefully this helps. Let me know if I can be of further assistance.
Answered 9 years ago
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