Cost per recruit analysis identifies the most economic customer or donor acquisition route
How to recruit customers or donors for less is a rarely considered area of business insight. Cost of acquisition [also known as Cost Per Recruit or CPR] at its' most basic can be defined as "the number of new customers divided by the total marketing expense on customer acquisition in the same period". Cost per recruit (CPR) analysis is a vital element in determining the most cost effective recruitment channels, offers, programs or lists.
CPR enables you to compare the effectiveness and cost of customer recrutment across channels, offers, programmes and lists. It is vital to compare the Cost per Recruit to the Lifetime Value generated. CPR is a Key Performance Indicator that should be measured regularly.
Maximise new customer revenue
Qbase has extensive experience in Cost of Acquisition Analysis and how to use it to reduce the cost of acquiring customers and also to ensure maximum new customer revenue. Traditionally marketing staff measure response as a percentage of the total volume of data mailed.
Only by carefully reviewing all three variables will you be able to identify and exploit the most efficient and profitable customer acquisition methods.
Cost of Acquisition analysis should always be considered in conjunction with Life Time Value [LTV], since some data sources that show a high cost of acquisition may also yield customers with the high LTV.