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Its not as hard as you might think. I'm sure Patrick (patio11/bingocardcreator.com) knows the cost of acquisition for 1 customer. If you're good with AdWords, i

by qeorge 17y ago

Its not as hard as you might think. I'm sure Patrick (patio11/bingocardcreator.com) knows the cost of acquisition for 1 customer. If you're good with AdWords, its pretty doable. Anecdotally, I've heard Amazon shoots for $23. Thus they'll put basically unlimited money into any system bringing in customers for < $23. You can run into a problem of volume though, i.e., you overfish the pond. Then you'll need to find new sources of customers (e.g., Facebook ads if you've only done SEM).

netcan 17y ago
Sure. With adwords you can know the COC. But not with referrals.
- qeorge 17y ago
  Perhaps not, but you can calculate the chance that a given customer will refer a friend, and factor that into their lifetime value. Even more interesting, you can see which actions are predictive of referring friends (e.g., leaving a comment on the suggested features list). You can use the same strategy to predict the conversion rate from free to paid.
- jfarmer 17y ago
  A referral effectively reduces the cost of acquisition, and you can calculate the extent to which it does that. http://20bits.com/articles/almost-viral-a-hybrid-acquisition-strategy/ http://20bits.com/articles/almost-viral-a-hybrid-acquisition...
patio11 17y ago
George literally stole the words out of my mouth. $12 to $15 via AdWords, incidentally. Unhappily for me, I'm capable of saturating all of Google's advertising inventory conveniently available at $15 per customer. (Its sort of like oil: the more you are willing to spend, the more exists in the world. I guess if I were an environmentalist I would describe my current state of affairs as Peak Bingo, but with some sustained effort into AdWords I could probably locate more sources of customers between $15 and $30, or alternatively in different mini-verticals.)
- qeorge 17y ago
  Thanks for sharing your customer acquisition cost. Do you ever buy traffic from anywhere else or are you happy with the volume from AdWords? BTW, still chuckling at Peak Bingo. Well put.
  - patio11 17y ago
    Today is November 25th. A click on November 25th turns into a purchase by, on average, November 27th. I have to pay Google on December 20th, with a credit card. My next statement date is January 7th, and my payment is due somewhere around January 20th. So, basically, if I get N clicks today, I get $30 two days from now and have to pay $15 two months from now. This is a long way of saying that, while I'm happy with my volume, I'd be more happy with, oh, enough volume to hit the limits on my credit cards. In fact, I'd avail myself of pretty much every source of credit less odious than juice loans from yakuza or opening an account with CapitalOne. I have paid for advertising elsewhere. The main issue is that a) Google has a de-facto monopoly on it in no small part due to the fact that b) their competitors s<%= "u" * (10 10) %>ck. Microsoft, for example, takes every bit as much work to get right as AdWords does, but you have to do it within their application, and they have less than one tenth the inventory Google does. To add insult to injury, it is at higher prices. I got a note in the email from them that my credit card had expired and could not bring myself to logging in to give them the updated credit card number, that is how useless they are to me.
    - qeorge 17y ago
      That makes sense. Since you seem to have found your own quarters-to-dollars machine I've been wondering why you aren't exploiting every possible source of profitable traffic. Sounds like a case of diminishing returns. I'm surprised prices @ Bing are higher, I'd assumed lower volume would mean lower competition and thus lower prices. But I definitely understand how the volume they can deliver isn't worth the time spent optimizing their system. Thanks for elaborating.

by qeorge 17y ago

netcan 17y ago

Sure. With adwords you can know the COC. But not with referrals.

qeorge 17y ago
Perhaps not, but you can calculate the chance that a given customer will refer a friend, and factor that into their lifetime value. Even more interesting, you can see which actions are predictive of referring friends (e.g., leaving a comment on the suggested features list). You can use the same strategy to predict the conversion rate from free to paid.
jfarmer 17y ago
A referral effectively reduces the cost of acquisition, and you can calculate the extent to which it does that. http://20bits.com/articles/almost-viral-a-hybrid-acquisition-strategy/ http://20bits.com/articles/almost-viral-a-hybrid-acquisition...

patio11 17y ago

George literally stole the words out of my mouth. $12 to $15 via AdWords, incidentally. Unhappily for me, I'm capable of saturating all of Google's advertising inventory conveniently available at $15 per customer. (Its sort of like oil: the more you are willing to spend, the more exists in the world. I guess if I were an environmentalist I would describe my current state of affairs as Peak Bingo, but with some sustained effort into AdWords I could probably locate more sources of customers between $15 and $30, or alternatively in different mini-verticals.)

qeorge 17y ago
Thanks for sharing your customer acquisition cost. Do you ever buy traffic from anywhere else or are you happy with the volume from AdWords? BTW, still chuckling at Peak Bingo. Well put.
- patio11 17y ago
  Today is November 25th. A click on November 25th turns into a purchase by, on average, November 27th. I have to pay Google on December 20th, with a credit card. My next statement date is January 7th, and my payment is due somewhere around January 20th. So, basically, if I get N clicks today, I get $30 two days from now and have to pay $15 two months from now. This is a long way of saying that, while I'm happy with my volume, I'd be more happy with, oh, enough volume to hit the limits on my credit cards. In fact, I'd avail myself of pretty much every source of credit less odious than juice loans from yakuza or opening an account with CapitalOne. I have paid for advertising elsewhere. The main issue is that a) Google has a de-facto monopoly on it in no small part due to the fact that b) their competitors s<%= "u" * (10 10) %>ck. Microsoft, for example, takes every bit as much work to get right as AdWords does, but you have to do it within their application, and they have less than one tenth the inventory Google does. To add insult to injury, it is at higher prices. I got a note in the email from them that my credit card had expired and could not bring myself to logging in to give them the updated credit card number, that is how useless they are to me.
  - qeorge 17y ago
    That makes sense. Since you seem to have found your own quarters-to-dollars machine I've been wondering why you aren't exploiting every possible source of profitable traffic. Sounds like a case of diminishing returns. I'm surprised prices @ Bing are higher, I'd assumed lower volume would mean lower competition and thus lower prices. But I definitely understand how the volume they can deliver isn't worth the time spent optimizing their system. Thanks for elaborating.