Kevin O’Leary calls it ‘one of the small business killers’

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Could this cost affect a small business?

Key Point

• Small businesses face many obstacles to success.
• Kevin O’Leary recently pointed out that reducing these costs can be a game changer for entrepreneurs.
• O’Leary believes high customer acquisition costs can hurt small businesses.

If you want to be a successful small business owner, there are many things you have to do right. You need to have a solid business plan, a product or service people are interested in, and a way to reach potential customers and let them know you can meet their needs.

Kevin O’Leary, better known as Mr. Wonderful, recently tackled one of the most difficult problems for fast-growing businesses to address. He showed that this could make or break your company’s success.

Kevin O’Leary warns this could ruin your small business

O’Leary is a Canadian businessman and entrepreneur who has also been featured on popular television shows. shark tankHe offers a lot of financial and business advice, including a recent Twitter post about a very important issue in determining whether a company succeeds.

O’Leary explained in a tweet:

Customer Acquisition Cost refers to the cost of actually getting a customer through your door for the first time. If it costs more to get customers interested in purchasing your product or service than they generate over the course of their relationship with you, your business is probably not viable.

Unfortunately, finding the right customer base can be expensive. Especially when you have to pay for targeted advertising through expensive channels, when each product sold has a low profit margin, or when your customers don’t tend to become repeat customers. to the nature of the product or service you are offering;

O’Leary correctly warns that many small businesses fail because the cost of customer acquisition is high. And he’s completely correct in saying that this problem could hit start-ups and new companies harder than established ones.

Small businesses don’t have a lot of cash to try to attract customers to their business checking accounts. Especially if you are just starting your business.Businesses fail when companies can’t pay what they need to attract customers flat If those potential customers end up buying enough to cover their acquisition costs, and then some more.

O’Leary has suggestions for reducing this potentially damaging expense.

O’Leary said it’s good news for small businesses worried about high customer acquisition costs. According to his tweet, there are ways to dramatically reduce those costs.

“Social media followers have completely changed the landscape of driving this cost down for entrepreneurs,” said O’Leary.

This is because it costs little or nothing to send a Tweet, post to Facebook or Instagram, or upload a TikTok. If you have a lot of followers, simply using these free media can attract potential customers to your business and significantly reduce your customer acquisition costs.

Of course, to follow O’Leary’s advice, you’ll need to actually have a large following on social media. To do this, we use available data to decide when to post and what content attracts followers, post regularly, engage with our audience, collaborate with other influencers in our industry, etc. steps.

As O’Leary pointed out, this can take time, but the value of having a large social media following follows if it means you don’t have to spend big bucks to get customers to try your company. great value.