Getting Customers Through the Door Comes at a Cost
When it comes to the iGaming industry, competition is tough. In fact, the iGaming industry is one of the toughest industries for new sites to survive in, and many don’t even make it past their first six months of operation.
Why?
Quite simply, the key ingredient to a successful iGaming site is the customer (or player). While this might sound a little too obvious, you’d be surprised at how often this is overlooked.
New iGaming sites worry more about their range of games, or creating attractive bonus offers and other marketing elements – more than acquiring new customers.
But what does getting new customers really entail, and what does it cost per acquisition?
Getting Customers Through the Door Comes at a Cost
The iGaming industry is a lot like the retail industry, it’s all about getting customers to step through your doors. But how do you do that?
There are many ways in which one can entice a potential customer to try your services. One of the most successful is through offering all sorts of benefits. In iGaming, this usually boils down to big and juicy sign up bonuses, free spins, no deposit bonuses and so on.
However, setting up these sorts of marketing campaigns do not come cheap, so you need to be able to work out what acquiring each new customer is going to cost you, before you even start out.
Simple Cost Per Acquisition Formula
Working out how much it will cost you to get that customer on board is not as hard as you might have thought.
CAC or Customer Acquisition Cost is a simple metric that is used by all sorts of industries to calculate their cost per acquisition over a certain period of time.
Let’s say for example, your acquisition campaign is designed to last for a month. The way to work out how much your cost per acquisition works out to, is to simply add your marketing and sales costs for that specific period, and divide that figure by the number of new customers that you got to sign up with you.
There is a simple formula for this process:
Sales + Marketing Costs / Number of New Customers (applies to a specific period of time)
Here’s a quick example for you: You spend $200,000 on marketing, and another $100,000 on sales.
You managed to get 500 new customers to sign up with you.
You can then determine that your cost per acquisition worked out to $600 per customer.
100,000 + 200,000 = 300,000 / 500 = 600
Read more about Customer Acquisition in our dedicated category.
