By definition, the Subscriber Acquisition Cost or the SAC is the amount of money that a business entity spends for each new subscriber that they gain. In simpler terms, this refers to the price that you have to pay in order to acquire a new subscriber. Calculating the SAC can come in handy when it comes to determining other metrics such as the Average Revenue per User or adding up marketing expenditure.
When it comes to setting the budget for your referral campaign, it is very important to consider the Subscriber Acquisition Cost to make sure that you actually make profits from as early on as possible. The Subscriber Acquisition Cost is derived (in its simplest form) by dividing the total costs that were spent on acquiring new customers at a given time by the number of new customers within the same time period. The money that you pay for acquiring customers can be spent on a number of marketing channels including advertising, email marketing and even SEO.
In order for your business to make more money, you will need to lower your SAC as much as profitably possible. If you employ multiple marketing methods, determining your SAC per marketing channel will help you identify the most efficient one and work on improving it. In addition to calculating your SAC, you will also need to consider the customers’ loyalty. While a lot of new customers are great, you will also need to consider obtaining customers who will remain with the business for longer. When it comes to referral marketing loyal customers are excellent for promoting subscriber engagement and for bringing in more clients to your business.
Email marketing and referral campaigns have long been proven the most cost effective forms of customer acquisition. With fully customizable and automated tools such as Incentivit, not only are the subscriber acquisition costs lower but they also require very little human interference once set up. With the right rewards system, it is possible for just about any business to obtain new subscribers in a steady stream with a good referral marketing campaign.