Why are Client Acquisition Costs (CAC) rising?

A long time ago in a business climate far far away cold calling was the greatest way to acquire business customers. It worked. You made 100 calls, got 10 leads and 1 sale. Work hard, make your calls and you’ll hit your number. Some people were better than others at pitching products, but essentially grinding out calls worked and those that worked hard at it hit their numbers.

Life was good until….voicemail. Voicemail became the ignore button and now you needed to make more calls for the same results. However persistence beats resistance, you could still brute force sales, make more calls, use auto dialers and leave voicemails. But extra work means more hours and no way around it, voicemail made salespeople less efficient and sales costs went up. Yeah, we used ACT and other early CRM tools but life was harder.

But it was time to strike back. Sales execs starting using marketing tools and thinking about lead generation. And then marketing automation changed everything. Cold call efficiency had been falling fast. Marketing Automation helped sales exec focus their time on calling qualified leads. Marketing automation was a new way to reach your contacts. Syndicate interesting content across the web, get it in front of your prospects, they click you call. Wow…sales was rocking again. Good leads rolling in from content, webinars and tracking technologies. Prospects didn’t even realize you knew what they clicked on, so when you called you looked really smart by offering them exactly what they wanted. That’s a great way to build rapport.

And then it happened. Prospects figured it out….if they click on content, expect the phone to ring…so they stopped clicking as much or disguised themselves or just filled out forms with emails like mibutt@gmail.com to download a whitepaper.

Just like voicemail made cold calling tougher, marketing automation is becoming less effective. Until we have a new marketing breakthrough, the cost of acquiring new clients will continue to rise…which could be one more reason everyone is focusing on keeping the customers they have.

To learn about our Service Catalog Platform, Book a Demo.